Senate OKs Bill to Expand Oil, Gas Drilling

Measure opens a section in the Gulf of Mexico but must be reconciled with a House version that allows production along the Pacific coast.

Source of this article – Los Angeles Times, August 2, 2006

WASHINGTON — With political anxiety on Capitol Hill rising along with gasoline prices, the Senate voted Tuesday to open a large section of the Gulf of Mexico to oil and gas drilling, advancing the energy bill that stands the best chance of approval this year.

‘We have less than 3% of the oil reserves in the world. The only way out of our problem is by doing something with alternative energy and conservation.’
Senate Minority Leader Harry Reid (D-Nev.)

The bill, approved 71-25, now must be reconciled with a broader and more controversial House measure that would relax the decades-long ban on drilling in most coastal waters, including along the Pacific coast.

Senators from both parties, attuned to constituents’ ire over high fuel costs, were eager to pass energy legislation before heading home for the summer recess. Eighteen Democrats joined 53 Republicans to support the Senate bill; 24 Democrats — including California’s Barbara Boxer and Dianne Feinstein — and one independent were opposed.

The Senate bill would limit new drilling to about 8.3 million acres in the Gulf of Mexico — an area thought to contain more than 1.2 billion barrels of oil and 5.8 trillion cubic feet of natural gas. The new drilling, though, would have little effect on overall energy supplies because the U.S. annually consumes about 7.3 billion barrels of oil and about 22 trillion cubic feet of natural gas.

By contrast, the House bill would lift, nationwide, the ban on drilling beyond 100 miles off the coast. It also would enable each coastal state to decide whether to permit energy exploration within 100 miles of its shore.

In return for opening their coasts to energy exploration, states would get a share of drilling royalties — a provision that gained the strong backing of Gulf Coast senators of both parties. Even so, a large number of coastal-state officials, including Republican Gov. Arnold Schwarzenegger of California, strongly oppose the House proposal.

The Senate measure is the product of a fragile compromise worked out by GOP leaders with Sen. Mel Martinez (R-Fla.), who dropped his opposition to drilling in the eastern Gulf of Mexico in return for a provision of the bill that would prohibit drilling within 125 miles of the Florida Panhandle through 2022.

To win the backing of Gulf Coast lawmakers, the bill would give Louisiana, Alabama, Mississippi and Texas a bigger chunk of the royalties from drilling in the newly opened area.

The Bush administration has expressed support for the Senate bill, calling it important to national security. Sen. Pete V. Domenici (R-N.M.), chairman of the Senate Energy and Natural Resources Committee, predicted that it would be the first step toward lifting the moratorium on coastal drilling in other parts of the country.

“This is the beginning,” Domenici said. “The precedent is going to be broken here … [and] then we can move step by step to other areas of American-owned property off other shores, with no damage, and produce our own natural gas and some of our own crude oil.”

Though narrowly focused, the bill still drew strong opposition from a number of coastal-state senators. They expressed fear that it would open the door to Republicans on the House-Senate conference committee to negotiate a more expansive final bill that would relax the nationwide ban on new offshore drilling.

“I’m worried about the bill,” Feinstein said after the vote. If the House attempts to broaden the measure beyond the Gulf Coast, she said, “there will be a filibuster for sure.”

Senate Minority Leader Harry Reid (D-Nev.), who voted in favor of the bill because of the funds it would provide for Gulf Coast restoration, has vowed to lead a bill-killing filibuster unless the House accepts the narrower Senate measure.

“Sen. Domenici should declare victory and keep quiet,” Reid said with exasperation. “With the help of the Democrats, his offshore drilling bill passed…. The Democratic caucus is very clear that there will be no more offshore drilling.”

House leaders, however, weren’t ready to accede to any Senate take-it-or-leave it demand.

“House Republicans strongly support our bill because we believe it does a better job of providing relief to working families being hit hard by high gasoline prices,” House Speaker J. Dennis Hastert (R-Ill.) and Majority Leader John A. Boehner (R-Ohio) said in a joint statement after the Senate vote.

But critics of the Senate bill said it would provide no immediate relief from high pump prices. And they added that Congress could do more to reduce U.S. dependence on foreign oil, such as toughening vehicle miles-per-gallon rules.

“What Republicans need to understand is we will never be able to produce our way out of the problems we have by producing in America. We have less than 3% of the oil reserves in the world,” Reid said. “The only way out of our problem is by doing something with alternative energy and conservation.”

But the bill’s supporters said it offered the best opportunity to respond to the public anger over high fuel costs.

“Huge input to our supply,” said Senate Majority Leader Bill Frist (R-Tenn.) “It’ll affect those gas prices, it’ll affect natural gas prices, which every American is feeling today.”

New offshore drilling, which has been banned in most U.S. coastal waters since the 1980s, has long been a hotly debated environmental issue — especially in California after a devastating oil spill off Santa Barbara in 1969. Polls show that a majority of Californians remain opposed to new drilling.

But pressure to allow new offshore drilling has been growing, especially from farm and business groups hard hit by increased fuel costs.

According to AAA, the nationwide average price of self-serve regular gasoline is $3.01 a gallon, up 72 cents from a year ago, and is projected to stay “in the vicinity of $3” for much of the rest of the summer.

In a recent USA Today/Gallup Poll, nearly three-fourths of respondents rated gas prices as extremely important or very important in their vote for Congress this year.

A number of Democratic candidates are seeking to portray Republicans as puppets of the oil companies, which have reported particularly large profits this year. In turn, GOP candidates have assailed Democrats for blocking measures to increase supplies, including drilling in the Arctic National Wildlife Refuge.

 

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