US Congress to consider new offshore gas bill

20 June 2007 18:09  [Source: ICIS news]

By Joe Kamalick

 

WASHINGTON (ICIS news)--A bipartisan congressional group introduced legislation on Wednesday to open US offshore areas to natural gas drilling, warning that the US will continue to lose chemicals production and broader manufacturing without it.

 

Congressmen John Peterson (Republican-Pennsylvania) and Neil Abercrombie (Democrat-Hawaii) led a group of six representatives who are cosponsoring the bill, called the National Environment and Energy Development (NEED) Act.

 

Natural gas is the principal feedstock for US chemicals production and also is an essential raw material or energy source for a broad range of US manufacturing.

 

Peterson said the bill, which is similar to an offshore gas development bill that he championed last year, seeks to enlist the help of environmentalists and labour groups along with business interests to lift 26-year-old congressional moratoria that bar drilling in 85% of the US outer continental shelf (OCS) regions.

 

Those regions are believed to hold in excess of 600trn cubic feet (tcf) of natural gas.  The US consumes about 22 tcf of gas annually, and gas prices have increased three-fold in the last five years.

 

“The number one issue in the US energy crisis is the cost and availability of clean, green natural gas,” Peterson said. 

 

“And we have a lot of it.  We could be awash in natural gas, but for 26 years we have been the only country in the world to lock up our offshore gas resources,” he said.

 

Peterson’s bill would open much of the 200-mile wide US continental shelf regions to drilling for gas only, and coastal states could continue to bar drilling within 100 miles of their shores if they wish.  States that allow gas drilling in an offshore area 25 miles from shore and up to 100 miles from their coastline would get 37.5% of federal royalties.

 

The federal government would retain only 25% of new offshore gas development royalties, and the 37.5% balance would be used to fund waterway restoration projects across the US and research in energy efficiency and renewable energy.

 

Peterson and Abercrombie said they are gaining support for their bill in the House and are talking with like-minded members of the Senate to build support there.

 

Although the then Republican controlled Congress passed a small offshore authorization bill late last year, prospects for Peterson’s new offshore development measure are said to be challenging in the new Democrat majority Congress.

By: Joe Kamalick
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