Government proposes beginning oil and gas lease sales in central Gulf of Mexico next year.

WASHINGTON (AP) _ The Interior Department on Thursday proposed beginning oil and gas leases as early as next year in an area now off-limits in the east-central Gulf of Mexico. <br/><br/>Lease sales in

Thursday, August 24th 2006, 6:04 pm

By: News On 6

WASHINGTON (AP) _ The Interior Department on Thursday proposed beginning oil and gas leases as early as next year in an area now off-limits in the east-central Gulf of Mexico.

Lease sales in the nearly 2 million acres of water would continue in each of the four years after that, according to a revised five-year leasing program made public by the Minerals Management Service.

For the first time, the plan contemplates possible oil and gas development off the Virginia coast. Leases would not be offered within 25 miles of shore and in a wedge-shape zone near the Chesapeake Bay to avoid conflicts with ship traffic.

The department also proposes leases in the North Aleutian Basin off Alaska. Like coastal Atlantic waters, this area currently is under a federal drilling freeze.

The proposed leases in these two areas would become available only if Congress were to end the drilling ban and the president modify a drilling freeze that bars development before 2012, according to the agency.

The Gulf leases are 100 miles south of the Florida Panhandle and well over 200 miles from most of Florida's western coast.

The House this summer passed legislation that would lift the congressional freeze in all coastal waters beyond 50 miles of shore. The Senate has approved a more narrow plan.

In all, the government said it plans to offer 21 leases in seven areas during 2007-2012: four in Alaska, two in the Gulf of Mexico and the one off Virginia.

The drilling plan will succeed one set to expire in June. The proposal is open for public comment and probably will be made final early in 2007 with little, if any, changes.

The plan envisions the first lease sales in the central Gulf area to take place next year, followed by additional sales there in each of the subsequent years of the planning period.

The Gulf lease proposal is similar to the one outlined by the agency in February. But a portion along the eastern edge of the area was removed because it is in a military training area.

The Minerals Management Service has estimated that the 2 million acres encompassing the proposed Gulf drilling plan contains 930 million barrels of oil and 6 trillion cubic feet of natural gas _ enough gas to heat 6 million homes for 15 years.

The proposed Gulf leasing area is much smaller than one approved recently by the Senate. Also, the Senate proposal would push drilling slightly farther from Florida's beaches, to no closer than 125 miles of shore.

The government also proposed offering new leases in a number of areas where there are no drilling restrictions: the western Gulf of Mexico and Alaska's Chukchi Sea, Beaufort Sea, and Cook Inlet.