Nearly 2 weeks after the US House passed an Outer Continental Shelf leasing reform bill, Senate leaders announced they are ready to move ahead with their own legislation.
Majority Leader William H. Frist (R-Tenn.) said on July 12 that the bipartisan agreement builds on S. 2253, the so-called Sale 181 bill held up since its passage Mar. 8 by the Energy and Natural Resources Committee.
The committee’s chairman, Pete V. Domenici (R-NM), delayed sending it to the floor while he tried to address Florida officials’ concerns and demands by four other Gulf Coast states for a share of future revenues.
Frist said 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.
Elaborating on the latter provision, Domenici said the compromise’s revenue-sharing section would direct money to producing states along the Gulf Coast, the federal treasury, and the Land and Water Conservation Fund.
Additional details were not immediately available. However, Sen. Mary L. Landrieu (D-La.), who was prominently involved in negotiations, said on June 29 that senators from Alabama, Louisiana, Mississippi, and Texas had agreed to reduce their demand for a share of future offshore oil and gas revenues to 37.5% from 50%.
Domenici reportedly was determined to keep the Senate’s vehicle focused on the eastern Gulf of Mexico and to not let its coverage expand to the Atlantic and Pacific coasts, as the House bill did with provisions aimed at providing coastal states options to allow federal oil and gas leasing off their shorelines.
Warner-Pryor bill
The Senate appears more likely to address that issue in a bill that John Warner (R-Va.) and Mark L. Pryor (D-Ark.) introduced on Feb. 15. But it’s not certain whether Domenici and the committee he chairs will be able to hold hearings on it before elections in November.
The House bill’s provision giving coastal states the right to also ban drilling near their shores apparently provided an opening for Senate energy leaders. They reached a compromise with one of Florida’s senators, Republican Mel Martinez, by adding 25 miles to the 100-mile buffer zone originally in S. 2253.
In addition to providing such protection through 2022, Martinez said, the compromise prohibits leasing east of the military mission line during that period, ensuring there would be no oil and gas activity within 234 miles of Tampa. He said it also provides producers holding acreage in the 125-mile buffer zone the option to swap their leases for tracts in other areas.
“This is a good deal for Florida and one we need to take so that we can protect our tourism economy, our pristine environment, and our expansive military training area,” Martinez said.
Florida’s other senator, Democrat Bill Nelson, conceded that the compromise comes close to what he and Martinez sought in a bill they introduced in February. Nelson had threatened to filibuster any bill with provisions similar to what the House passed on June 29.
Frist was not specific about when S. 2253, with its compromises, would reach the Senate floor. Domenici reportedly would like a vote before the August recess.