US Republican leader says offshore gas possible

08 June 2007 05:04  [Source: ICIS news]

WHITE SULPHUR SPRINGS, West Virginia (ICIS news)--Former US House speaker Newt Gingrich said on Thursday that the chemical industry could increase prospects for congressional approval of more offshore gas access if states are given a larger share of royalty revenues.

Gingrich, a Republican who is also a potential candidate for the 2008 US presidential election, told chemical executives that it would be difficult but not impossible to get Congress this year to lift more of the 25-year-old congressional moratoria that now bar offshore drilling in 85% of US outer continental shelf regions.

The outer continental shelf areas off the US east and west coasts and along Alaska’s long shoreline hold vast reserves of natural gas and oil but are closed to development under congressional edict for fear that drilling would spoil recreational beaches and tourism.

The US chemicals industry is wholly dependent on natural gas as a feedstock and has been lobbying Congress for five years – without significant success – to open outer continental shelf areas to development.

Speaking at the annual meeting of the American Chemistry Council (ACC), Gingrich said an offshore energy bill that gave east and west coast states development royalty revenues would change the political dynamic for the issue in state governments and consequently in Congress.

"The amount of money over the next 10 to 20 years [that would be available to coastal states] would be so massive, you would see the beginning of a real splintering of the political structure in those states," Gingrich said.

He said labour unions and other interest groups that ordinarily support state government opposition to offshore drilling would begin to falter.

"You would have the prison guards’ union in California saying, ‘How much money are we talking about?’ and asking why California is not drilling offshore," he said.

A state revenue-sharing feature was a key part of the small offshore development bill that Congress approved late last year, but the previously closed area of the outer continental shelf to be developed in the eastern US Gulf is very small.

Gingrich said public reaction to the high cost of energy and the potential for state revenue gains could combine with energy-related job losses and public perception of foreign energy dependence to move an offshore bill through Congress.

"I wouldn’t give up on it," he told some 400 industry executives at the concluding session of the council meeting.

By: Joe Kamalick
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