Latest Gulf of Mexico Lease Sale a Land Grab for Carbon Capture?

Pore space land grab? RED President Steve Hendrickson weighs in on recent speculation that the latest federal lease sale in the U.S. Gulf of Mexico was a land grab tied to the burgeoning carbon capture industry.

Steve Hendrickson, Ralph E. Davis Associates
Latest Gulf of Mexico Lease Sale a Land Grab for Carbon Capture?

The standard form of lease on the BOEM website for oil and gas development restricts the lessee’s activities to oil and gas production only, Hendrickson writes. (Source:

Earlier this month, the U.S. Bureau of Ocean Energy Management (BOEM) released the results of OCS Sale 257. One of the interesting observations was the large number of contiguous blocks that were leased in the western Gulf of Mexico. These blocks lie on the western shelf in some cases just beyond the limits of state jurisdiction, in a strip that reaches from Beaumont to Corpus Christi, Texas. Given the proximity to large industrial facilities that emit significant amounts of CO₂ some commentators have speculated this may be a land grab by major players attempting to lock up pore space before the carbon capture, utilization and storage (CCUS) industry takes off.

That may be what’s going on, but if so, it appears to me there are some regulatory hurdles in their way. Here are a couple of observations.

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