Hoping that states will be enticed by billions of dollars in potential oil and gas royalties, lawmakers say they have a good chance to end a drilling ban that was enacted a quarter-century ago on most of the country's offshore waters.
WASHINGTON — Hoping that states will be enticed by billions of dollars in potential oil and gas royalties, lawmakers say they have a good chance to end a drilling ban that was enacted a quarter-century ago on most of the country's offshore waters.
The House planned to consider on Thursday a bill ending the drilling ban, six weeks after a measure that would have allowed natural gas development in all coastal waters fell a handful of votes short of being approved.
This time, the bill would keep the ban in place within 50 miles of shore and allow states to continue the federal drilling moratorium up to 100 miles off shore if they act to do so every five years.
The bill's authors also would revamp the revenue sharing agreement with the states, so that they potentially would reap billions of dollars in future oil and gas royalties if they accepted drilling.
But the issue remains a politically sensitive one.
In the Senate, Florida's two senators have vowed to filibuster any legislation that would end the moratorium, which has been in place in Outer Continental Shelf waters from New England to southern Alaska since the 1980s except for the eastern and central Gulf of Mexico where the country's offshore oil and gas rigs are concentrated.
And many coastal states continue to be adamantly opposed to lifting the ban, even if states have a say in where it remains in place.
The governors of Connecticut, New Jersey and Delaware sent letters to House leaders saying the offshore drilling moratorium should be lifted only "as a last resort, not a first step toward achieving energy independence."
They said they feared if a nearby state were to allow drilling, their ocean beaches -- and multibillion-dollar tourist and recreational economies -- could be hit by an oil spill or affected by related onshore infrastructure. It's a concern that has been voiced especially loudly by Florida's congressional delegation, although some of the state's lawmakers support the legislation.
The bill endangers "one of America's most precious natural resources, our pristine beaches," said Rep. Jim Davis, D-Fla., who wants no energy development within 150 miles of Florida's shore.
Rep. Richard Pombo, R-Calif., instrumental in crafting the bill as chairman of the House Resources Committee, argues that the oil and gas deposits lying beneath offshore waters are needed and can be extracted with the necessary environmental protection given today's drilling technology.
He argues that if a state -- including his own -- doesn't want to open its waters to oil and gas companies it can bar them by having its legislature and governor agree to continue the federal ban.
Pombo has sought to broaden the bill's appeal by revamping the way revenue from the oil and gas royalties would be shared with the states. It's a windfall for the four Gulf states -- Texas, Louisiana, Mississippi and Alabama -- that already have oil and gas rigs off their shores, and a potential for billions of dollars in new revenue for states that agree to offshore drilling.
The four states would stand to gain the most under the revenue sharing changes, according to an analysis by the nonpartisan Congressional Budget Office. It estimated that the bill would funnel $20.6 billion in oil and gas royalty revenues to states between 2006-2017. All but $1.7 billion of that money would go to the four Gulf states that now have drilling, CBO said.
Those numbers could change, at least for the early years, because the bill's sponsors planned to extend the phase-in for increased revenue sharing with the states. Still, the financial benefits to the states would be substantial.
Gulf Coast lawmakers say that's only fair and that most of the money would pay to repair coastal wetlands, tidal barriers and for flood protection.
"It's not a windfall," said Rep. Charlie Melancon, D-La. "We've paid for it through the years. ... It's something we deserve to have just like other states that provide energy and get royalties."
Rep. Bobby Jindal, R-La., who introduced the measure, said Louisiana last year collected $32 million, although the federal government received $6 billion in royalties from drilling off the state's coast. "This attempts to treat states more fairly," he said.
But the proposed changes in revenue-sharing have raised alarms at the Interior Department because every dollar going to the states would be one less dollar heading to the Treasury.
The department estimates that under current leasing plans and the freeze in place, all but about $5 billion of an anticipated $205 billion in offshore royalty payments would go the states over the next 15 years.
Under the proposed changes in the House bill, the federal share would drop to $131 billion and the states' share soar to $91 billion.
Source: Associated Press
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