By ALAN SAYRE
NEW ORLEANS -- A huge glut of natural gas, a recession and an uncertain economic picture led to a largely quiet auction for government offshore leases on Wednesday.
Energy companies bid $115 million for 162 separate tracts in the western Gulf of Mexico, about half of the leases bid on last year for $483.9 million.
Gas is now trading for a meager $3.11 per thousand cubic feet on the New York Mercantile Exchange -- compared with $9.50 a year ago. About 80 percent of the winning bids Wednesday were for tracts in deep water, where crude can also be found.
The largest single winning bid -- $28.1 million issued for a deepwater tract by BP PLC -- accounted for 24 percent of all sales.
Since the recession hit hard last year, U.S. natural gas backlogs have grown to an estimated to 3.152 trillion cubic feet, 23.1 percent above year-ago levels and 19.6 percent higher than the five-year average, according to the Energy Information Administration.
Producers also are exploiting huge reserves on land, which have only recently been made available through advanced drilling techniques.
As recently as four years ago, 20 percent of all natural gas in the U.S. was pulled from the Gulf. That number has since fallen to about 12 percent, according to the EIA.