House passage of HR 4761 on June 29 tossed US Outer Continental Shelf legislation back to the Senate just before the Independence Day recess. The question since then was how the Senate would respond.
The answer came July 12 when Majority Leader William H. Frist (R-Tenn.) announced a bipartisan agreement that builds on S. 2253, the so-called Sale 181 bill. It had been held up since its passage by the Energy and Natural Resources Committee on Mar. 8 while chairman Pete V. Domenici (R-NM) tried to address Florida officials’ concerns and demands by four other Gulf Coast states for a share of future revenues.
Frist said that the agreement responds to Florida’s concerns by establishing a 125-mile buffer off its coast through 2022 while protecting military training activities in the Gulf of Mexico. “In addition, it also provides a fiscally responsible revenue-sharing system for revenues generated by new leases in certain parts of the Gulf,” he said.
Awaits details
One of Florida’s two senators, Democrat Bill Nelson, said the concept apparently comes close to what he and Republican Mel Martinez, the other senator, sought in February. “It sounds promising. But the devil’s always in the details,” Nelson said.
Meanwhile, a provision in the House bill that would give coastal states more control over activities off their shorelines still needs to be addressed in the Senate. Several House members said during debate on HR 4761 that they liked the idea of not having to return annually and petition for renewal of a moratorium.
The provision could possibly reappear in the Senate if a bill that would give coastal states the option to consider offshore leasing moves through the Energy and Natural Resources Committee and to the Senate floor.
The House’s bill clearly provided the momentum needed for the Senate energy committee’s leaders to forge the compromises needed to get S. 2253 to the floor.
Revenue-sharing
“I applaud the House for recently taking action to increase access to American oil and gas resources in the OCS. I hope with this agreement the Senate will also be able to act,” Domenici said July 12. It includes a revenue-sharing system for producing states on the Gulf Coast, the Land and Water Conservation fund, and the federal treasury, he indicated.
Support by consumer groups was the apparent primary force behind passage of the House’s bill. “They made all the difference. There were sportsmen’s groups, labor groups, and others. They were dead serious,” one industry lobbyist told me.
Others said that while opposition from the administration of President George W. Bush to sharing OCS revenues gave House leasing opponents ammunition on June 29, it might not prevail since it considered only losses from existing leases and not future revenues, income taxes, and economic benefits from areas currently off-limits. As another group’s lobbyist put it, “Sixty-three percent of something is better than 100% of nothing.”