Senate approves Gulf of Mexico OCS leasing bill

Aug. 7, 2006
The US Senate, by a 71-25 vote, passed legislation Aug. 1 to expand federal oil and gas leasing in the Gulf of Mexico.

The US Senate, by a 71-25 vote, passed legislation Aug. 1 to expand federal oil and gas leasing in the Gulf of Mexico.

The measure, which calls for leasing of parts of the controversial Outer Continental Shelf Sale 181 and 181 South areas in the eastern gulf, faces an uncertain future. It almost certainly will wind up in conference for reconciliation with a more ambitious measure the House passed June 29 on OCS leasing reform.

The Senate’s Gulf of Mexico Energy Security Act calls for the leasing of 2.5 million acres within 1 year and 5.8 million additional acres as soon as practicable.

It excludes leasing until June 30, 2022, of acreage within 125 miles of Florida’s west coast and 100 miles of its panhandle plus a large area east of the “military mission line,” a north-south boundary that crosses land at about Fort Walton Beach, Fla.

Sens. Robert Menendez (D-NJ), Olympia J. Snowe (R-Me.), and Dianne Feinstein (D-Calif.) opposed the bill, saying they wanted similar 125-mile buffers for their states.

Sen. Bill Nelson (D-Fla.) threatened to filibuster any bill that comes out of a conference with the House that doesn’t include the coastal protection provision in the Senate’s current bill.

Other opponents criticized S. 3711’s provision that would share 37.5% of future federal OCS revenues in the gulf with Alabama, Louisiana, Mississippi, and Texas. The White House’s Office of Management and Budget expressed qualified support for the measure as long as shares to the four states don’t exceed a $500 million limit.

Senators from the four Gulf Coast states defended the provision. Jeff Sessions (R-Ala.) noted that the shares would be directed to conservation programs in the states that would indirectly benefit the entire country.

The US will benefit more directly from the oil and gas that would be produced from new leases authorized under the bill, he added.

Domenici’s efforts

Other senators applauded work by Energy and Natural Resources Committee Chairman Pete V. Domenici (R-NM) in making the compromises necessary to create a bill able to pass the full Senate. “It is absolutely the best bill the Senate can pass at this time,” said Assistant Majority Leader Mitch McConnell (R-Ky.).

Lamar Alexander (R-Tenn.) said the bill’s potential contribution to domestic gas supplies is its single most important feature. He noted that the Senate’s even considering OCS leasing legislation marks an important change in attitudes.

“Two years ago, the idea was mentionable. Last year, when natural gas prices passed $15[/MMbtu], there were 50 of us who wanted to do something about it, but that was not quite enough. Yesterday, more than 70 senators voted to move this bill forward. I think that’s significant,” he said.