US House to consider offshore drilling soon
11 September 2008 23:37 [Source: ICIS news]
WASHINGTON (ICIS news)--House Democrat leaders promised on Thursday they would consider a comprehensive energy bill next week, but a leading Republican advocate of offshore drilling said the Democrat measure is “energy lite, lite, lite” with little chance of passage.
House Majority Leader Steny Hoyer (Democrat-Maryland) said that “I expect to consider a comprehensive energy bill early next week”. Hoyer is the second-highest Democrat in the House, behind Speaker Nancy Pelosi (Democrat-California).
The Democrats’ energy legislation is said to be undergoing additional changes but will include provisions to open more of US outer continental shelf (OCS) regions to oil and natural gas drilling.
Opening of the OCS to energy development has been a longstanding objective for US chemical producers and a broad range of other manufacturers who are heavily dependent on natural gas as a feedstock and fuel.
If the Democrat bill provides for even modified offshore development, it would mark a major turnaround for Pelosi and others of her party who have adamantly opposed lifting the 27-year-old congressional moratorium on drilling in 85% of US offshore waters.
Access to vast US offshore energy resources has become a major issue in the US presidential campaign and for members of Congress who are seeking re-election in the 4 November national vote.
However, Representative John Peterson (Republican-Pennsylvania), a leading champion of offshore energy development, said on Thursday that he remains sceptical of Democrats’ intentions toward coastal drilling.
“I haven’t seen a piece of legislation from them [Democrats] that will open up the OCS to development,” Peterson said in an interview. “They’ve got to have a better bill than what I hear they’re working on.”
Peterson said that he understands the Democrat-sponsored energy bill would end the 27-year-old moratorium but then codify a permanent ban on drilling within the first 50 miles (80km) of the 200-mile wide US outer continental shelf region. The second 50-mile portion of the OCS territory would be open to drilling, but only if the coastal state bordering that region votes in favour of development.
“But the Democrats’ bill denies the states any share of the royalties from development off their shores,” Peterson said, “so that means there is no incentive for state legislatures to authorise drilling.”
A bipartisan offshore development bill that Peterson has sponsored and which has broad support gives states a large share of royalties that would be collected on development of the federally owned offshore regions.
“By keeping the first 50 miles off limits and denying revenue sharing to states for the second 50 miles of the OCS, the Democrats’ bill essentially would maintain the moratorium for the first 100 miles of the shelf,” Peterson said.
“This is not adequate. We’ve got to do better than that,” he said.
Peterson said that he understands that the Democrats’ bill also includes “some poison pills,” such as increased taxes for oil companies and short-term “use it or lose it” restrictions on offshore development leases.
“From what I know of it, the Democrats’ bill is energy lite, lite, lite,” Peterson said.
He said that if the Democrats introduce a bill along the lines described to him thus far, “they are not being serious about getting an energy bill done”.
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