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January 09, 2007 --- Vol. 13, No. 4January 2007

President Bush lifts moratorium on Bristol Bay oil and gas leasing

President Bush today lifted the moratorium on oil and gas leasing in the U.S. Minerals Management Service North Aleutians planning area that includes Alaska’s Bristol Bay and part of the southeast Bering Sea. The president also lifted the moratorium on leasing in the central Gulf of Mexico. The federal government is increasing the royalty rate for most new offshore deepwater federal oil and gas leases outside Alaska to 16.7 percent.

“Together, these actions will enhance America’s energy security by improving opportunities for domestic energy production, and will also increase the revenues that the federal government collects from oil and gas companies on behalf of American taxpayers,” said Interior Secretary Dirk Kempthorne.

President Clinton withdrew the North Aleutians outer continental shelf from leasing in 1998 through the year 2012, primarily in response to concerns about the potential impact of oil exploration and development on the Bristol Bay salmon fishery. But a decline in the fishery in recent years has spurred interest in the possible economic benefits to the local communities that would result from petroleum development — offshore Bristol Bay is thought to have high potential for the discovery of natural gas, with some potential for the discovery of oil.

Aleutians East Borough has expressed cautious optimism about the lifting of the moratorium.

“The president has opened the door for us,” said Aleutians East Borough Mayor and fisherman Stanley Mack. “But we’re going to walk through it very, very cautiously. We need to make sure development can work with the traditional commercial and subsistence fisheries we have relied on for thousands of years.”

And Alaska Gov. Sarah Palin welcomed the news of the president’s decision.

“It is gratifying that the federal government is again looking north to Alaska to provide the energy our nation needs,” Palin said. “Development in the Bristol Bay region could provide the jobs, economic diversification and energy the people of this region need. If we can be sure it will not threaten the fisheries that are the foundation of the region’s economy and way of life, I’m all for it.”

The lifting of the moratorium will enable MMS to include the North Aleutians area in the agency’s 2007 to 2012 outer continental shelf leading plan. But a lease sale in the area would require a detailed environmental review.

For the full story see the Jan. 14 edition of Petroleum News.

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