Legislators have assured the National Ocean Industries Association that Congress will challenge the U.S. Interior Department's proposal to abolish the Minerals Management Service.
They also told last week's NOIA annual meeting in Washington they will try to open the Arctic National Wildlife Refuge (ANWR) Coastal Plain to drilling and end spending moratoria that block some offshore lease sales.
Sen. Larry Craig (R-Idaho) called MMS "a perfect example" of an agency that should be fine tuned, not killed. And he predicted Congress will lift some offshore drilling bans by the end of the year.
Rep. Ken Calvert (R-Calif.), who heads a key House resources subcommittee, plans to conduct hearings on the moratoria in May. "We need to encourage exploration and collect more revenues where we can find them," he said.
INTERIOR DEFENDED
Robert Armstrong, assistant Interior secretary for land and minerals management, defended the MMS "devolvement."
He said producing states could handle MMS' onshore royalty collection duties and suggested the Interstate Oil & Gas Compact Commission could draft uniform collection rules.
He said Interior might consider giving oil companies more time to drill offshore tracts than the 5, 8, and 10 year terms (depending on water depth) currently allowed.
Armstrong said, "If you could show us it would be useful to have a longer period of time, we could talk about more flexibility in lease terms, particularly in deeper water."
But he added Interior might want slightly higher rentals in exchange.
Alaskan state legislators were in Washington last week lobbying Congress to open ANWR. Sen. Frank Murkowski (R-Alaska), Senate energy committee chairman, was optimistic about that prospect.
He told NOIA, "We think there's a good opportunity because there's a revenue stream from this (leasing)."
Idaho's Craig was pessimistic, however. He said a vote would be ,'very close" because ANWR is such a paramount issue for environmentalists. He added President Clinton would be likely to veto an ANWR bill, anyway
TAX CREDITS
Rep. Bill Archer, chairman of the tax writing House ways and means committee, said there is little chance of independent producers getting tax credits for marginal oil and gas production in this session of Congress because revenues are so tight.
But he said if Congress agreed to lease ANWR, he would be willing to earmark part of the $3 billion of leasing revenues for marginal well tax relief.
Archer also said he will push this year to abolish the alternative minimum tax and change "foreign source tax' provisions, both of which eat into petroleum revenues.
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