US sets onshore oil and gas leasing plan for 2010

24 November 2009 20:37  [Source: ICIS news]

WASHINGTON (ICIS news)--US Interior Secretary Ken Salazar on Tuesday announced broad onshore oil and natural gas leasing plans for 2010 and promised that oil, gas and coal will continue to play important roles in the Obama administration’s energy policies.

But Salazar also had harsh words for unnamed energy industry trade associations, saying they have used “poison and deception” to criticise his department’s policies.

Several major energy industry trade associations - and some in Congress - have accused the Obama administration in general and the Interior Department in particular of using go-slow tactics to delay and discourage development of carbon-based resources in favour of renewable and alternative energy technologies.

The production, availability and pricing of natural gas are crucial concerns for the US petrochemicals industry and downstream chemical producers because the sector is heavily dependent on natural gas as both a major feedstock and energy fuel.

Salazar said the Department of the Interior will hold 38 lease sales next year for energy development on 2.7m acres of federal lands in nine western states and in Alaska.

He said the Obama administration will continue to invite oil and gas development while it pursues what he termed a more balanced energy policy.

“Our nation needs a balanced and appropriate use of our conventional and renewable energy resources,” Salazar told a press conference.  “That means oil, gas and coal will continue to play an important role in our energy mix as we develop and expand the use of wind, solar, geothermal and other renewable sources.”

Salazar was asked to respond to drilling industry criticism that the Obama administration had issued 1,000 fewer leases in its first year than did the administration of President George W Bush.

“Frankly, we have made many announcements of onshore and offshore leasing programmes, a significant number of properties,” Salazar said, noting that by the end of this year his department will have held 36 lease sales covering nearly 2,400 parcels on nearly 3m acres of federal lands.

“We have brought our nation’s energy development into balance, ensuring that those oil and gas resources are developed in the right way and in the right places,” he said.

“But you wouldn’t know it from the untruths that are being issued by oil and gas industry trade associations,” Salazar added. Although he did not identify specific trade groups, he said that some had used “poison and deception” in criticising the administration’s oil and gas development policies.

In addition, he said that significant portions of parcels already leased to energy companies are not being aggressively developed.

“Of the more than 7,000 current onshore leases, some 5,211 are not producing, and of the 53,585 offshore leases, 26,000 are not producing,” Salazar said. “So large parts of the public domain are being made available but are not being developed.”

Some energy legislation pending in Congress would impose a “use it or lose it” deadline on exploration and development companies for leases they acquire.

Salazar said his department is in the process of “rebalancing” the 2007-2012 offshore leasing programme that had been issued by the Bush administration in its final days in office but which was ruled invalid by a federal court on environmental grounds.

He said he could not say when a new five-year offshore development plan would be ready, but that “I hope to bring my evaluation of that plan to a conclusion in the near future”.

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By: Joe Kamalick
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