US Senate kills offshore bill, cuts reserve buys

13 May 2008 21:25  [Source: ICIS news]

WASHINGTON (ICIS news)--The US Senate on Tuesday voted down yet another effort to open vast US offshore oil and gas reserves to drilling, with a chief Senate opponent saying the idea of increasing production to ease fuel prices is “ridiculous”.

 

In a largely party-line decision, the Senate voted 56-42 to defeat an amendment by Republican senators Mitch McConnell of Kentucky and Pete Domenici of New Mexico that would have authorised coastal states to develop federally owned offshore oil and gas reserves on a state-by-state basis.

 

The renewed bid to open some 85% of US offshore areas to energy development - regions closed to drilling under a 26-year-old congressional ban - was widely supported by chemical companies and the broad US manufacturing sector.

 

US chemicals production is heavily dependent on natural gas as a feedstock and energy fuel.

 

The measure had support among most Senate Republicans and one Democrat - Mary Landrieu of Louisiana - who argued that just by lifting the congressional ban Congress would signal US willingness to develop its own domestic resources and thus bring down record prices for oil and gasoline.

 

Senator Robert Menendez (Democrat-New Jersey), who led opposition to the offshore measure, accused the bill’s backers of “doing the bidding of the oil companies to look for a way to tap a new vein and deepen our nation’s addiction to oil”.

 

“The idea that opening up the coast to oil drilling would do anything to gas prices is ridiculous,” Menendez said.  “With gas prices sky-high and with the planet in peril [from global warming], the answer is not to drill ourselves into a deeper hole.  The answer is to become more energy efficient, develop more alternative sources of energy and keep our planet intact.”

 

Menendez said he opposed offshore drilling because it could jeopardise New Jersey’s recreational beaches and tourist industry.

 

Domenici, the ranking Republican on the Senate Energy Committee, said the Senate vote against offshore energy development “is a missed opportunity to end the cycle of dependence on foreign oil”.

 

“Some around here may wonder why Congress has such low approval ratings,” Domenici said.  “This is why.”

 

The Senate did approve a bill to suspend federal purchases of crude for the strategic petroleum reserve (SPR), a measure meant to increase oil supplies in the US market.

 

Opponents of the SPR suspension bill argued that it would have no impact on oil markets. The US purchases some 70,000 bbl/day for the reserve, an amount equal to 0.3% of US daily oil consumption of 21m bbl.

 

($1 = €0.65)

 

To discuss issues facing the chemical industry go to ICIS connect

By: Joe Kamalick
+1 713 525 2653

< previous article(VIDEO - ICIS news Europe Lunchtime Bulletin 27 October 2009)

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly