U.S. Senate Passes Gulf Drilling Bill, Set for Showdown with House

By J.R. Pegg

WASHINGTON, DC, August 1, 2006 (ENS) - The Senate today approved legislation that would greatly expand oil and gas drilling in the Gulf of Mexico, but proponents acknowledge the measure faces an uncertain future. Lawmakers must reconcile the bill with a much more expansive version passed last month by the House of Representatives and neither side appears willing to give ground and forge a compromise.

The Senate bill, which passed by a vote of 71-25, would open 8.3 million acres of the eastern Gulf of Mexico currently closed to oil and gas drilling and share federal leasing revenues with four Gulf Coast states. It bans drilling within 125 miles of the Florida panhandle and within 230 miles of Florida's west coast until 2022.

Reserves of oil and gas are located under the sea floor in many parts of the Gulf of Mexico. This rig is in Texas waters. (Photo by Michael Sutton courtesy © WWF-Canon)

Florida's two senators warned they would block any bill that resembles the House legislation.

"I cannot support the House version," said Florida Republican Senator Mel Martinez who told colleagues he has had "clear assurances" from Senate Republican leaders that they are committed to holding the line on the Senate bill.

Florida Senator Mel Martinez (Photo courtesy Office of the Senator)

Florida Democratic Senator Bill Nelson vowed to filibuster the final bill if it mirrors the House plan and Senate Minority Leader Harry Reid has said he would rally Democrats to support such a move.

This means the final bill in effect needs 60 votes to pass – a tough hurdle for the Senate, said Senator Pete Domenici, a New Mexico Republican and lead sponsor of the bill.

"This is no turkey shoot, passing a bill in the Senate," Domenici said. "You don't just have to sharpen up and hit one, you have to get 60 votes … you fool around with it and change it and you could go back down to 59, 58, and be dead again."

A joint statement by House Republican leaders praised the Senate for passing the bill, but said the House measure "does a better job of providing relief to working families being hit hard by high gasoline prices."

Pennsylvania Congressman John Peterson is coauthor of the House measure that would open vast stretches of the Gulf of Mexico to drilling. (Photo courtesy Office of the Congressman)

"Unfortunately, our current energy crisis is neither limited nor modest," said Peterson, a Pennsylvania Republican. "A crisis of this severity can be solved only through serious and decisive action. And though the Senate bill fails to meet that standard in my view, it does represent an important opportunity to move the discussion forward."

Domenici said the bill is the first step to rolling back the moratorium, which he said reflected the "crazy idea that these resources should be locked up when you can drill for them without hurting anybody."

"It is finally going out the window, little by little with this bill," Domenici said. "This is the best bill we can get right now."

In order to ensure passage in the Senate, Domenici scrapped an earlier version of the bill and agreed to increase the buffer around Florida and to include royalty sharing with the four other Gulf Coast states – Alabama, Louisiana, Mississippi and Texas.

The Senate bill earmarks 37.5 percent of the revenues from new leasing to the four states and also diverts 12.5 percent to the Land and Water Conservation Fund.

Oil rig in the Gulf of Mexico (Photo courtesy NASA)

"This bill will drain billions of dollars from the federal treasury – that is indisputable," said Senator Barbara Boxer, a California Democrat.

The royalty sharing provision is "a terrible precedent, to let a few states benefit at the expense of all the rest simply because of their proximity to a natural resource," said Senator Mark Dayton, a Minnesota Democrat.

Dayton described the bill as "nothing more than a special interest boondoggle for the oil and natural gas industries and for four Gulf states who would, for the first time, get a direct cut of that bonanza."

Proponents say the royalty sharing offers fair compensation to the Gulf states and can be used as a carrot to encourage other coastal states to allow drilling off their shores.

"When we put this model in place of sharing royalties with the appropriate coastal states, then we open possibilities in the future even more," said Senator David Vitter, a Louisiana Republican. "It is a new model to get us to greater energy independence, to get us away from the pervasive not-in-my-backyard mentality that has gripped virtually every state around the country."

Senator Jeff Bingaman, a New Mexico Democrat, countered that there was little substance to the claim the bill will dramatically boost domestic energy supplies.

"The claims of the natural gas that will be produced under the bill are exaggerated," Bingaman said. "The sponsors of the bill claim that 5.83 trillion cubic feet of natural gas will be produced. However, over half of that natural gas will be leased next year and produced anyway under the Department of the Interior's proposed plan."