Senate nears OK of drilling in gulf

8.3 million-acre area has been protected by ban for 25 years

August 01, 2006|By MARNI GOLDBERG | MARNI GOLDBERG,CHICAGO TRIBUNE

WASHINGTON -- The Senate moved closer yesterday to approving legislation that would make 8.3 million acres in the Gulf of Mexico available for oil and natural gas drilling and end a quarter-century ban against tapping the rich energy resources in coastal waters.

Facing increasing prices for crude oil and natural gas, which have left Americans paying more for gasoline and for heating and cooling their homes, the bill's proponents say this represents an opportunity for America to increase domestic supplies of energy.

And with oil-producing regions overseas turning politically unstable and higher energy demands in China and India pushing costs higher, supporters said it is important for the U.S. to take steps to meet its own energy needs. The bill's backers say this area contains enough natural gas to heat and cool about 6 million homes for 15 years.

The Senate voted to limit debate and amendments on the measure by a 72-23 vote, a margin that should ensure passage this week, barring an unexpected hitch. The House has approved a separate but broader bill to allow drilling in coastal waters - including along the Pacific Coast - that has drawn major opposition from environmental groups.

"If the goal is to maximize eventually over time the coastal production of America from a venue of stagnation ... what you do is make the first 10 yards right now," said Republican Sen. Pete Domenici of New Mexico, chairman of the Senate Energy and Natural Resources Committee. "This is the first 10 yards, this is a breakthrough."

The area of the Gulf of Mexico under consideration has been protected by a drilling moratorium for the past 25 years, which Congress has renewed annually. The ban covers 85 percent of America's coastal areas. The region in the east-central gulf covered by the Senate bill is known as Lease Area 181 and Lease Area 181 South.

Environmental groups have raised concerns about lifting the long-standing prohibition. However, some lawmakers have taken issue with provisions of the legislation that specifically prohibit drilling from between 125 miles and 230 miles off Florida's shore until 2022 while awarding royalties to four Gulf states that allow drilling: Texas, Louisiana, Mississippi and Alabama.

"[The bill] sets bad precedent in both the energy policy area and the fiscal policy area," Sen. Jeff Bingaman of New Mexico, the top-ranking Democrat on the energy panel, told the Senate.

"There is no reason I can think of why coastal states up and down our seaboards will not demand the same kinds of treatment being demanded by the states that are insistent upon the provisions in this legislation," he said.

The Bush administration also expressed concern about the revenue-sharing portions of the bill, which would give 37.5 percent of revenues to the Gulf states. Energy Department spokesman Craig Stevens said the agency is hopeful that the bill, assuming it passes the Senate, will emerge from a House-Senate conference committee as legislation that President Bush can sign.

But given the differences in the two pieces of legislation and the expressed unwillingness of some lawmakers to reach a compromise, the reconciliation of differences could prove a challenge.

Republican Florida Sen. Mel Martinez said, "I cannot support the House version ... and I have clear assurances from our leaders that we are committed to working from the framework of the Senate bill." The added protection to Florida's coastline, which is not contained in the House bill, prevented an expected filibuster of the Senate legislation by Martinez and Democratic Florida Sen. Bill Nelson.

Manufacturers expressed strong support for the bill, saying it will go a long way in reducing the price of natural gas that is used for manufacturing. Since 2000, the soaring price of natural gas has resulted in the loss of 3.1 million manufacturing jobs, according to Paul Cicio, president of the Industrial Energy Consumers of America, a nonprofit organization representing manufacturing interests.

Aside from the environmental costs associated with oil exploration, critics claim that the legislation's impact on oil prices will not be significant and that allowing more drilling will only increase America's addiction to oil. The amount of oil the area contains is small when compared to the nation's everyday use, said Karen Wayland, legislative director of the Natural Resource Defense Council.

Marni Goldberg writes for the Chicago Tribune.

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