Progress seen in opening US offshore to drilling

06 June 2008 02:27  [Source: ICIS news]

PALM DESERT, California (ICIS news)--Progress is being made toward opening more domestic US oil and gas reserves to development but easing the 26-year-old congressional ban will take time, a top chemical industry official said on Thursday.

 

Jack Gerard, president of the American Chemistry Council (ACC), told a press conference that he is confident that gains are being made in the long-standing effort to convince members of Congress to lift the ban on energy drilling in 85% of US outer continental shelf (OCS) regions.

 

“But progress in this area is incremental, as it always has been,” Gerard said.

 

Natural gas is a major feedstock for US chemicals manufacturing, and prices for natgas have risen four-fold since 1999, putting pressure on industry margins.

 

Gerard noted that in late 2006 a coalition of chemical and manufacturing industries helped advance an offshore energy bill sponsored by Representative John Peterson (Republican-Pennsylvania) to open more of the offshore region in the eastern US Gulf to development.

 

Although the region opened to drilling was a relatively small 8.3m acres, Gerard said that legislative victory was significant because it marked the first time in 25 years that Congress had agreed to grant energy industry access to some additional offshore areas.

 

Since that December 2006 legislative win, Gerard said he and others have been working to sway still more members of Congress to lift the offshore ban.  The ban, which covers the US East and West Coasts and Alaska’s long shoreline, was put in place by Congress in 1982 when gas was plentiful and cheap and coastal states feared that drilling would pollute their tourist beaches.

 

“Just a few years ago, you would have had trouble getting within a 50-vote margin for opening the OCS to development, but now we’re at a point where we’re working on one or two key votes,” Gerard said.

 

“We may get another piece of the OCS opened this year,” he added.

 

Gerard said that support in the House for Peterson’s latest offshore drilling bill is nearing the point where it may get consideration by the full House. 

 

Representative Peterson has previously complained that the Democrat majority leadership in the House has not allowed his offshore drilling bill to come to a vote.  However, if Peterson gets enough cosponsors to the bill, the leadership must allow a vote anyway.  Gerard said the number of cosponsors is nearing that point.

 

Gerard said that the current debate in Congress over whether to impose a cap-and-trade emissions mandate on US industry has helped the council educate more members on the necessary link between emissions controls and the need for more energy resources.

 

Gerard spoke at the annual council business meeting here, where it was announced that he will leave the trade group in October to take up a new role as chief executive at the American Petroleum Institute (API).

 

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By: Joe Kamalick
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