By the OGJ Editors
WASHINGTON, DC, Apr. 5 --US government and industry officials said support in Congress is waning for various lease "swapping" proposals now being considered as the Senate deliberates a comprehensive energy bill this spring.
Senators from Louisiana and California wanted to see legislation that closed a decades-old billion-dollar dispute between industry and California over offshore oil leases (OGJ Online, Feb. 18, 2002). Their proposal directed the Secretary of the Interior to provide oil companies holding California leases with a swap of equivalent value in the Gulf of Mexico within 30 days of the bill's passage.
A similar plan was considered by Florida and Texas lawmakers, industry sources said.
But Department of the Interior officials predicted Apr. 5 that it was unlikely any amendment would formally be offered as part of the Senate energy bill.
US Sens. Barbara Boxer and Dianne Feinstein (D-Calif.) and John Breaux and Mary Landrieu (D-La.) said in February their proposal would cancel the 40 remaining non-producing offshore oil and gas leases in California and create an environmental preserve to permanently protect these areas. The plan did not impact the 43 federal tracts now producing oil and gas.The bill also banned future drilling, but existing federal and state laws already prevent companies from doing so.
Industry opposition
Industry trade groups had avoided commenting publicly on the proposal but several oil companies privately lobbied against the swap arrangements because they feared the companies that did not hold leases in Florida or California would be left with an unfair competitive disadvantage.
There also was a concern that swaps may limit future drilling because environmental groups may try to use swaps as a way to control future lease areas.
Interior never issued a formal opinion on proposed swap arrangements.
