Representatives of offshore drillers could count on two trips a year to New Orleans to hear their multimillion-dollar bids on oil and gas leases in the Gulf of Mexico read aloud in the Superdome. Not anymore.
The Obama administration said Friday it was ending the practice of holding public auctions in favor of an online system in which bids are opened via live stream.

This nod to the digital age comes only four months after climate change protesters swarmed the government’s last offshore Gulf auction. A spokeswoman for the Bureau of Ocean Energy Management said the change in format had been under discussion for some time as a means to cut costs and make it easier for people to view the auction. But she conceded the protests played a role in the decision.

“We certainly did have to take into consideration the safety of everyone, both attendees and our employees,” Caryl Fagot said. “We’ve talked about live broadcasting on the internet as soon as we got the internet. It’s not something that’s never been discussed before.”

In March, hundreds of protesters – organized by environmental activists – stormed into New Orleans’ Superdome during an offshore auction, attempting to drown out the announcer by chanting, “Shut it down.”

At the time, no injuries were reported. But a government official in attendance that day said some federal employees were bruised in the melee, though none suffered a “serious injury” – an assertion disputed by protesters who described the action as nonviolent.

Protests have become a more regular feature of government oil and gas auctions, as climate change activists push world governments to shift away from fossil fuels. Last year the Bureau of Land Management postponed an auction in Utah after reports that hundreds of protesters planned to attend.

The announcement Friday that there would be no more public auctions drew condemnation from activists, who characterized the move as an attempt to draw the process behind closed doors.

“This action further tightens the loop between agencies and fossil fuel agencies and sets an alarming precedent for what was a pretty narrow avenue for public participation in the process,” said Laurel Sutherlin, spokesman for Rainforest Action Network, an environmental group in San Francisco.

For the landmen who find and buy oil and gas leases for the world’s oil companies, traveling to New Orleans each March and August had become a regular and high-stakes ritual. Two years ago, 50 companies bid at the Superdome, paying more than $850 million for oil and gas leases in the central Gulf.

But since the crash in global oil prices in late 2014, interest had waned. The lease sale this past March generated only $156.4 million, the fourth-lowest total in the Gulf’s Central District since 1983.

Randall Luthi, president of the trade group National Ocean Industries Association, said he didn’t expect the decision to hurt bidding and described the auction as more symbolic than anything.

“The reading of the bids was never a venue for dialogue,” he said. “With the technology available, it makes sense to see how well this process works. What is important to note is that this is only the reading of the bids.”

The first digital-only lease sale will be Aug. 24. In what will be the final lease sale of the Obama administration before the president leaves office in January, Bureau of Ocean Energy Management officials will auction off all the remaining acreage that hasn’t been leased in the western Gulf district – a total of 23.8 million acres.


Source: HoustonChronicle

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