For Louisiana’s senators, one lease sale and two interpretations

“This restoration work is critical for the continued production of the oil and gas that fuels our economy; to protection our coastal communities from storms and preserve a unique and cherished way of life. Instead, today, we received nothing. I will not rest until this injustice is fixed,” Landrieu said in a statement.

The $38 million is actually just a taste of what the bill, which faces Interior Department resistance, could ultimately provide Gulf states.

It would speed up revenue-sharing authorized in a 2006 law and abandon a $500 million annual cap on payments for the states.

For Vitter, the modest bidding — one industry official called the sale a “yawner” — is evidence of what he calls White House policies that discourage energy production on federal lands and waters.

“There is no disputing the fact that our nation's domestic energy production on federal lands is far lower than what was projected before this administration took office, and is trending in the exact opposite direction of the rapid growth we're seeing on private and state land,” he said in a statement.

The Western Gulf of Mexico oil-and-gas lease sale brought the lowest dollar total in 14 years for sales in the region, according to the energy news service Platts, with John Rodi, a senior official with Interior’s Bureau of Ocean Energy Management, calling the $102.4 million in high bids “good under the circumstances.”

He noted, in the Platts story, that companies could be taking a breather to assess their existing holdings. “We believe companies are also taking the opportunity to look at what they've acquired [in recent sales] and how they will invest,” Rodi said.

The Houston Chronicle, in its story on the sale, noted that it reflected tepid interest in shallow-water western Gulf areas.

Most of the bids unsealed Wednesday were for the deepwater tracts offered in the western region, the paper noted.

One industry group said federal regulations played a role in the modest bidding.

“The cost impacts to industry of continued changes to the regulatory system, such as the newly proposed production systems safety rule and the upcoming [blowout preventer] rule, could have figured into how companies bid in today's Western Planning Area sale, as did the current low price companies can fetch for natural gas,” said Randall Luthi, president of the National Ocean Industries Association.

“While this sale was not eye-popping, and may be closer to a yawner, it shows that interest in deepwater tracts remains strong,” he said in a statement.

Interior on Wednesday called the sale evidence of the Obama administration’s support for domestic energy production, even while acknowledging it was smaller than other recent auctions.

A March auction of leases in the central Gulf, which has lots of deepwater tracts that companies covet, netted almost $1.2 billion in high bids.

“This offshore oil and gas lease sale supports continued growth in safe and responsible domestic oil and gas production,” said Tommy P. Beaudreau, director of Interior’s Bureau of Ocean Energy Management.

“Over the past fourteen months, the offshore oil and gas industry has invested well over $3 billion in new federal leases in the Gulf of Mexico,” he said.