US to sell Arctic land leases in November for oil, gas production

Thu Oct 18, 2012 2:23pm EDT

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* November lease sale includes 400 tracts

* Obama, Romney have sparred on U.S. oil output

* Prior lease sale raised $3.6 mln in winning bids

By Ayesha Rascoe

WASHINGTON, Oct 18 (Reuters) - The Interior Department said Thursday it plans to offer up 4.5 million acres of Arctic land for oil and gas production next month, as the Obama administration's energy policies face more scrutiny ahead of the November elections.

The Nov. 7 lease sale, a day after the presidential election, will include 400 tracts in the National Petroleum Reserve-Alaska, an area set aside by the government for oil and gas development.

U.S. President Barack Obama is locked in a tight election battle against Republican challenger, Mitt Romney, who has accused Obama of stifling domestic oil output.

A presidential debate earlier this week featured heated exchanges between the two candidates over energy issues, with Obama defending the amount of drilling that has occurred on federal land under his watch.

"The November sale is in line with the President's direction to continue to expand domestic energy production, safely and responsibly," Interior Secretary Ken Salazar said in a statement.

U.S. oil production is at its most in 17 years, but critics of the administration say much of that growth has come from private lands.

The Obama administration contends that while output on federal lands has dropped following the 2010 BP oil spill, production from public lands is still up compared with pre-2008 levels, before Obama took office.

Obama ordered the Interior Department to begin holding annual lease sales in the Alaska reserve in 2011, after U.S. gasoline prices spiked.

Last year, the department auctioned 3 million acres in the reserve, earning $3.6 million in winning bids.

While the reserve was established in 1923 as a source of petroleum for the nation's military, there has never been commercial production from the area.

Recent oil discoveries may change this, however, with ConocoPhillips and Anadarko Petroleum looking to produce oil from a field in the reserve.

This summer, the Interior Department issued a proposal that would allow drilling on only 11.8 million acres in the 23- million-acre reserve.

The move was lauded by environmentalists for its protection of wildlife, but angered oil and gas drilling supporters, who felt the plan was too restrictive.

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