Advertisement

Oil experts encouraged by high gulf lease sale volume

Published: Nov. 17, 2021 at 6:27 PM CST
Email This Link
Share on Pinterest
Share on LinkedIn

NEW ORLEANS (WVUE) - Oil prices dropped on Nov. 17 as the U.S. Department of the Interior reopened massive tracts of the Gulf of Mexico for new oil exploration.

Oil and gas interests are encouraged by a high volume of activity in the bid for those new leases.

With gas prices rising across the country, the pain at the pump is real.

After the Biden administration placed a moratorium on new offshore drilling leases in January, the Bureau of Ocean and Energy Management conducted its first lease sale on Gulf of Mexico exploration tracts in over a year and oil company response was brisk.

“In today’s sale, BOEM got 317 bids on 308 tracts,” said Eric Smith, with the Tulane Energy Institute.

That is nearly three times more bidding than occurred a year ago with 33 active oil companies bidding more money.

“The last lease this time of year ago generated $121 million. This one looks like $192 million,” said Smith.

Tulane energy expert Eric Smith says oil companies are more interested in shallow drilling than they have been in years, possibly to tap into natural gas pockets.

“Pipelines are there, if it’s available I might take a shot,” said Smith.

And though he says perception has a lot to do with gas prices, it will take years for any of these new leases to be developed.

AAA said prices at the pump have gone up by almost $1.30 a gallon in the last year, and some say much more is needed to see them stabilize.

“If you continue to affect the ability of oil and gas operators to go out and explore then produce oil you ultimately continue to reduce the supply,” said La. Attorney General.

While the Biden administration remains committed to a reduction in fossil fuels, some say balance is needed, to help consumers make ends meet.

“Any fast food I had to cut down on since I commute to work and spend a lot of money on gas,” said Chris Lyons of New Orleans.

But with crude oil prices dropping and more activity in the gulf, many consumers hope to get a break sooner rather than later.

Last year there were 12 bids placed oil exploration in shallow water 600 feet or less. This year there were 140 Shallow water bids submitted to the Bureau of Ocean and Energy Management, a shift in trends toward deepwater drilling.

See a spelling or grammar error in our story? Click Here to report it. Please include the headline.

Copyright 2021 WVUE. All rights reserved.