ENRG - Feds selling oil drilling leases off Florida coast

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http://www.boston.com/dailynews/336/nation/Federal_government_selling_oil:.shtml

Federal government selling oil drilling leases in eastern Gulf, first time since 1988

By Alan Sayre, Associated Press, 12/2/2001 15:16

NEW ORLEANS (AP) In a sale that was limited under a compromise between the Bush administration and the president's brother, the federal government this week is selling petroleum drilling leases off Florida's Gulf Coast for the first time in more than a decade.

The Minerals Management Service will lease tracts for oil and gas exploration in a 1.5 million-acre area Wednesday. That's a reduction from the 5.9 million acres that President Bush initially proposed.

After President Bush made his proposal, environmentalists and the president's brother, Florida Gov. Jeb Bush, fought to block the drilling.

The original lease area came as close as 17 miles to Pensacola in Florida's Panhandle, raising concern about potential damage an oil spill could cause to the state's tourist beaches.

The area being offered on Wednesday is at least 100 miles from the beaches of Florida, Alabama and Mississippi, and the eastern edge is 285 miles from Tampa Bay.

When President Bush took office, the United States faced natural gas prices that had jumped above $10 per thousand cubic feet and oil selling for around $36 per barrel.

But because of a sharply slower economy and increasing supplies, oil is selling today at $17 to $18 per barrel and natural gas goes for around $2.

When the scaled-back area was announced in July, Interior Secretary Gale Norton predicted the auction would raise $136 million for the government. Even though petroleum prices have dropped since then, the MMS said it still expects a strong sale because the area is close to proven deep-water reserves.

''This is acreage that the industry has been most interested in for a number of years,'' said Barney Congdon, an MMS spokesman in New Orleans.

Oil companies refused to discuss their bidding plans before the sale.

The federal government has sold leases off the coasts of Texas, Louisiana, Mississippi and Alabama in two annual auctions since 1982.

Officials estimate the acreage being offered this week contains at least 185 million barrels of oil and 1.25 trillion cubic feet of natural gas, enough to run a million families' cars for six years and enough natural gas to heat the homes of a million families for 15 years.

-- Anonymous, December 03, 2001


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