Opposition to Senate OCS leasing bill takes shape

Opposition to expanded US offshore oil and gas leasing likely will focus on compromises reached with Florida and four other Gulf Coast states when the full Senate debates S. 3711 later this week.

July 25, 2006

3 min read

Nick Snow
Washington Correspondent

WASHINGTON, DC, July 25 -- Opposition to expanded US offshore oil and gas leasing likely will focus on compromises reached with Florida and four other Gulf Coast states when the full Senate debates S. 3711 later this week.

Senators from other coastal states that oppose oil and gas activity off their shores already have asked why the bill's proposed 16-year, 125-mile buffer zone should apply only to Florida. Others will question a provision giving a 37.5% share of future federal oil and gas revenues off their coasts to Alabama, Louisiana, Mississippi and Texas.

An analysis by the Energy and Natural Resources Committee's minority staff said the bill would have a net negative impact on US energy security in several ways: It would put more than 20 tcf of natural gas out of reach through 2022 to satisfy officials in Florida, add three areas containing an estimated 2.9 tcf of gas which currently are not off limits, and shift production from domestic independent producers to multinational oil companies by replacing tracts closer to shore with acreage in much deeper water.

The analysis also challenged S. 3711's revenue projections and a $500 million cap on Alabama, Louisiana, Mississippi, and Texas's shares that the committee's minority staff believes is in the bill to avoid triggering the "long-term" budget act in the Senate.

Even with the cap, the four states would receive $28.5-$30.5 billion of additional revenue, it said. Without it, the states would receive about $170 billion. The cap also contains "net-of-receipts" revenue-sharing language, which could give the four states at least another $660 million annually, the analysis said.

Finally, the minority staff said, S. 3711 is "a likely ticket to a highly problematic conference" with H.R. 4761, the much broader OCS leasing reform bill which the US adopted on June 29. "Recent public statements by key House Republican leaders and their staffs discount the notion that the House of Representatives would pass the Senate bill in lieu of asking for a conference," the analysis said.

Meanwhile, Sen. Bill Nelson (D-Fla.) belatedly gave his support to S. 3711 on July 24 but expressed concern that its Florida coastal protection provision might be dropped in a conference with the House. He said that he would file a bill asking senators to reject H.R. 4761.

"If the Senate position, providing protections for Florida's economy and environment, is at risk in negotiations with House members, then I can't support sending something over to them for a series of closed-door negotiations. During these negotiations, supporters of more drilling easily could adopt their own horrendous plan to allow oil and gas rigs just several miles off the nation's shorelines," Nelson said.

Florida's other US senator, Republican Mel Martinez, and the eight senators from the four other Gulf Coast states endorsed S. 3711 last week after reaching compromises with Majority Leader William H. Frist (R-Tenn.) and Energy and Natural Resources Committee Chairman Pete V. Domenici (R-NM).

Contact Nick Snow at [email protected].