Drilling advocates hail end to US offshore ban

24 September 2008 22:13  [Source: ICIS news]

WASHINGTON (ICIS news)--Offshore drilling advocates in Congress hailed on Wednesday the decision by Democrat leaders in the House to end the 27-year-old congressional ban on oil and gas drilling in US outer continental shelf regions.


Representative David Obey (Democrat-Wisconsin), chairman of the House Appropriations Committee, said on the floor of the House on Wednesday that a stop-gap spending bill meant to fund federal government operations until March will not contain language renewing the ban on offshore drilling in 85% of US outer continental shelf (OCS) regions.


The congressional offshore drilling moratorium has come under increasing fire from the US public as retail gasoline costs rose to above $4/gal.  Many Democrats in the House have expressed reluctance to renew the ban, citing voter opposition and anger over high fuel costs.


Each year since 1981 the Interior Department appropriations bill has contained a one-sentence ban on spending by the department for offshore oil and gas development along the US East and West Coasts and in the eastern part of the Gulf of Mexico near Florida’s west coast.


Led chiefly by Representative John Peterson (Republican-Pennsylvania), a coalition of Republican lawmakers along with some Democrats have worked to have the drilling moratorium lifted on grounds that the US needs access to what may be vast offshore energy reserves.


Earlier this month the House passed - in a straight party-line vote - an energy bill that the Democrat majority said would open some of the OCS to drilling, but the measure was broadly criticised by industry and Republicans as a sham.


The offshore drilling ban was put in place in 1981 when natural gas was plentiful and cheap in North America and amid widespread concerns that offshore drilling would despoil coastal recreational beaches and ruin tourism.


But as natgas prices have climbed steadily since 1999, the US chemicals industry - heavily dependent on natural gas as a feedstock - and a broad spectrum of other manufacturing interests have been pressing Congress to end the drilling ban.


A spokesman for Peterson said the Democrat majority’s decision to end the drilling moratorium “is a huge victory for the American people”.


Senator Pete Domenici (Republican-New Mexico), ranking member of the Senate Energy Committee, said that “Democrats have done a 180 (degree turn) on this issue".


“As the price of gasoline rose, the American people became outraged that Democrats have blocked us from producing offshore,” Domenici said.


Domenici warned, however, that the end of the ban - which will come when the current Interior Department fiscal year ends on 30 September - does not necessarily mean that broader offshore drilling will be either immediate or certain.


“It will be up to the next president and the next Congress to decide if they want to take these resources off the table once again,” he said.


Republican presidential nominee Senator John McCain supports offshore drilling.  His Democrat opponent in the 4 November national election, Senator Barack Obama, says he supports limited offshore energy development.


($1 = €0.68)


To discuss issues facing the chemical industry go to ICIS connect

By: Joe Kamalick
+1 713 525 2653

AddThis Social Bookmark Button

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

Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index

Related Articles