Offshore drilling plan widens energy policy rifts

April 09, 2006|By NEW YORK TIMES NEWS SERVICE

WASHINGTON -- A Bush administration proposal to open an energy-rich tract of the Gulf of Mexico to oil and gas drilling has touched off a tough fight in Congress, the latest demonstration of the political barriers to providing new energy supplies even at a time of high demand and record prices.

The 2 million-acre area, in deep waters 100 miles south of Pensacola, Fla., is estimated to contain nearly half a billion barrels of oil and 3 trillion cubic feet of natural gas, enough to run roughly a million vehicles and heat more than half a million homes for about 15 years. The site, Area 181, is the only major offshore leasing zone that the administration is offering for development.

But lawmakers are divided over competing proposals to expand or to limit the drilling. The Senate Energy Committee and its chairman, New Mexico Republican Pete V. Domenici, are pushing for a wider drilling zone, while the two Florida senators and many from the state's delegation in the House are arguing for a smaller tract. Other lawmakers oppose any new drilling at all.

The debate could go a long way toward defining how the nation satisfies its need for new energy and whether long-standing prohibitions against drilling in the Outer Continental Shelf, the deep waters well beyond state coastlines, will end.

The fight, meanwhile, threatens to hold up the confirmation of President Bush's choice to lead the Interior Department, Gov. Dirk Kempthorne of Idaho. Kempthorne, a former senator, was nominated last month to replace Gale A. Norton, a strong proponent of the plan, who resigned March 31. Like Norton, Kempthorne is an advocate of developing new supplies of energy through drilling.

While environmental groups say that discouraging new drilling would spur development of alternative fuels, administration officials say that timely action in Area 181 and beyond could bring short-term relief to the nation's energy needs and, perhaps, lower fuel costs for consumers.

"It's important to have expansions of available acres in the Gulf of Mexico as other areas are being tapped out," Norton said recently.

She predicted that drilling in the offshore zone would lead to further development in parts of the Outer Continental Shelf that have been off-limits since the 1980s under a federal moratorium that Congress has renewed each year and that every president since then has supported.

States are beginning to challenge the prohibitions. Legislatures in Georgia and Kansas recently passed resolutions urging the government to lift the bans. On Friday, Gov. Tim Kaine of Virginia, a Democrat, rejected language in a state energy bill that asked Congress to lift the drilling ban off Virginia's coast. But he did not close the door to a federal survey of natural gas deposits.

Meanwhile, Rep. Richard W. Pombo of California, chairman of the House Resources Committee, plans to introduce a bill in June that would allow states to seek control of any energy exploration within 125 miles of their shorelines. A similar bill was introduced in the Senate last month.

Currently, coastal states can offer drilling rights only in waters within a few miles of their own shores.

Pombo and other lawmakers would also change the royalty distribution formula for drilling in Outer Continental Shelf waters so states would get a share of the royalties that now go entirely to the federal government. Senators from Alabama, Louisiana and Mississippi are co-sponsoring a bill that would create a 50-50 split.

As exceptions to the federal ban, the western and central waters of the Gulf of Mexico produce nearly a third of the nation's oil and more than a fifth of its natural gas. But Area 181 has been protected because of its proximity to Florida and the opposition of the president's brother, Gov. Jeb Bush.

By its current boundaries, the pending lease area is a much smaller tract than the 5.9 million acres the Interior Department first considered leasing more than 20 years ago and the 3.6 million acres that the department proposed to lease in 2001.

This year, 2 million acres of the original tract are proposed for lease as the only waters of the Outer Continental Shelf that the administration is making available for 2007-2012.

The proposal is an administrative action that does not require congressional approval, but it is still subject to public comment before being made final. Unless Congress directs the administration to change course, the administration's final plan would lead to bidding on new leases in 2007.

Concerned that fuel costs are choking family budgets, Domenici wants to open a much bigger tract.

A bill he co-sponsored with his panel's ranking Democrat, Sen. Jeff Bingaman of New Mexico, would open up 2.9 million acres, and possibly an additional 700,000 acres now reserved for military training. It is the most ambitious proposal in Congress, with the promise of 6 trillion cubic feet of natural gas and nearly 1 billion barrels of oil. The committee recently voted, 16-5, to move it to the Senate floor.

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