Democrats remove OCS leasing bans from continuing resolution

Faced with the prospect of a presidential veto of a continuing resolution, congressional Democrats deleted language dealing with US Outer Continental Shelf oil and gas leasing restrictions on Sept. 23.

Sep 26th, 2008

Faced with the prospect of a presidential veto of a continuing resolution, congressional Democrats deleted language dealing with US Outer Continental Shelf oil and gas leasing restrictions on Sept. 23.

House Budget Committee Chairman David R. Obey (D-Wis.) "negotiated the best package he could get with the White House to take a budget standoff off the table so we can address the larger Bush financial crisis. The White House made it clear any new drilling provision was a non-starter. The future resolution of offshore drilling will have to be addressed with a new president," a spokesman for Speaker Nancy Pelosi (D-Calif.) said.

The decision meant that existing moratoriums will expire on Sept. 30, but leasing will not begin immediately in those areas. The US Minerals Management Service, which has jurisdiction over federal offshore acreage, continues to operate under a five-year plan which began in mid-2007, a spokesman said on Sept. 24. The only acreage in that plan which was covered by a moratorium was off the coast of Virginia, where a sale is tentatively scheduled for 2011, he told OGJ.

He noted that MMS has received more than 160,000 comments after US Interior Secretary Dirk A. Kempthorne launched preparation of a new OCS plan which would cover the 2010-15 period. "We're currently evaluating and reviewing those comments. It's too early to say which areas will be considered, but we are looking at areas that were under moratorium. We're not scheduled to finish planning for the program until mid-2010," the MMS spokesman said.

There also were indications that a one-year moratorium on developing leasing regulations for federal oil shale resources in three western states would not continue. The US Bureau of Land Management hopes to finalize such regulations by the end of the year, a spokesman for that agency said on Sept. 24.

'Unified insistence'

Congressional Republicans immediately claimed a victory. "The news that Democrats have finally recognized the significance of this energy crisis and will allow the moratorium on deep sea and oil shale production to expire is welcomed by the millions of American families, farmers and small businesses struggling to make ends meet because of their soaring energy bills. But more importantly, it is a victory born directly from their unified insistence that Congress put America on a path of energy independence," House Minority Whip Roy Blunt (R-Mo.) said.

"While details remain unclear, I hope the Democrats do not use this as an opportunity for another ruse that would put vast energy reserves under lock and key. While the expiration of this ban is critically important, we must do more to invest in alternative and renewable energy sources that will fuel our economy in the future," he continued.

"The Democrats' capitulation is a victory for middle-class Americans who have suffered under the crushing burden of high [gasoline] prices. After a long summer of $4 gas, with winter home heating bills on the way, this good news could not have come too soon," added House Republican Conference Chairman Adam Putnam (Fla.).

Sen. Pete V. Domenici (R-NM), ranking minority member of the Energy and Natural Resources Committee, said on Sept. 24 that few gave a bill he introduced on May 1 to lift offshore and oil shale leasing bans much chance of passing. "Now, not even five months later, Democrats have done a 180-degree turn on this issue. As the price of gasoline rose, the American people became outraged that Democrats have blocked us from producing offshore and from developing oil shale for many years. The American people spoke, and joined Republicans in Congress with a unified message: find more oil, use less," he said.

It will be up to the next president and Congress to determine whether these resources should be taken off the table again, he continued. "With these bans no longer in place, work can begin to allow us to tap into our abundant oil and gas resources – if our leaders don't lock them back up next year. Americans will be watching closely," Domenici said.

Contact Nick Snow at nicks@pennwell.com

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