Senate takes up offshore drilling bill

Published 6:07 pm Wednesday, July 26, 2006

The Senate is taking up an election-year bill that would open a large area of the central Gulf of Mexico to oil and gas drilling.

The bill would affect an 8.3 million-acre area believed to contain large amounts of natural gas and 1.3 billion barrels of oil. Opponents of the legislation fear it’s a first step to lifting a moratorium that for decades has prohibited drilling in 85 percent of the country’s coastal waters from New England to Alaska.

Senators were expected to vote Wednesday to begin debate on the legislation, a largely procedural move that could set up a final vote later this week or early next.

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A month ago, the House passed a much broader offshore energy development bill that would lift the ban on oil and gas drilling that has been in effect for 25 years in most waters outside the western Gulf of Mexico. That bill would still bar drilling within 50 miles of the shoreline, but it would open waters beyond that to energy companies unless a state specifically acts to protect waters within 100 miles of shore.

Senate Republican leaders said they didn’t have enough votes to push such a broad measure through the Senate.

Instead, the GOP leaders, along with a few Democrats, favor a more limited bill that directs the Interior Department to begin selling oil and gas leases in 8.3 million acres of the central Gulf. It does not address drilling elsewhere.

Senate Majority Leader Bill Frist, R-Tenn., said Tuesday that if the bill passes he would work to keep it focused and limited to the 8.3 million acres in negotiations with the House.

That may be hard to do.

Rep. Richard Pombo, R-Calif., a key sponsor of the House bill passed last month, said Tuesday he saw no way the House would accept the limited Senate legislation as a substitute for its bill.

Sen. Pete Domenici, R-N.M., chief sponsor of the Senate bill, argued that the additional oil and gas found in Lease Area 181 in the central Gulf could “bring enough oil and gas to market to ease supply constraints and stabilize energy prices.”

The 2 million acres in Area 181 and 6.3 million deep-water acres to the south that also would be opened under the bill are believed to have at least 1.3 billion barrels of recoverable oil and 5.8 trillion cubic feet of natural gas, enough to heat 6 million homes for 15 years, according to the Interior Department.

Domenici says the offshore drilling measure is likely to be the only energy legislation that has a chance to emerge from Congress this year, despite a growing public clamor over high gasoline costs and grumbling from industry about high natural gas prices.

Talk of offshore oil and gas drilling has its own political pitfalls. Senators from many coastal states worry about potential oil spills that could harm beaches and jeopardize tourist industries.

Several senators are expected to push for a guarantee that the long-standing moratorium remain in place along the Pacific and Atlantic coasts until 2022. It is now approved by Congress annually.

To ease concerns of the Floridians, who continue to adamantly oppose oil and gas development in the eastern Gulf region, the Senate bill would bar drilling in a buffer ranging from 125 miles to as much as 230 miles from shore, and assure the drilling ban remains in place until 2022.

The bill would funnel tens of millions of additional dollars in royalties to four Gulf states — Texas, Louisiana, Mississippi and Alabama — that already have drilling rigs off their coasts. These states would get 37.5 percent of future royalties from oil or gas taken from federally controlled waters, compared with less than 2 percent today.

Sen. Jeff Bingaman, D-N.M., estimated that “over the next 60 years this entitlement to the Gulf Coast states would have a total value of at least $170 billion.”

Sen. Mary Landrieu, D-La., who helped broker the compromise bill, argues that the four states have long been shortchanged and that the new federal money would go to restore coastal wetlands and improve hurricane protection.

Energy companies, manufacturers and other industry groups have clamored for developing offshore energy, especially natural gas. The Business Roundtable recently urged lawmakers “to capitalize on this window of opportunity” when the need for more domestic energy has become apparent.

Environmentalists argue it will take six years to bring any of the new oil or gas to market and there already are vast supplies of untapped reserves in waters not subject to drilling restrictions.

“The oil and gas industry is sitting on 33 million acres of Outer Continental Shelf leases which it hasn’t developed,” said David Alberswerth of the Wilderness Society.

Alberswerth says the government’s own estimates show there’s four times more recoverable natural gas — 328 trillion cubic feet — in offshore areas where drilling is allowed, compared to waters under drilling bans.