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Senate Energy Panel's Budget Package Would Open ANWR, But Silent on OCS

Conspicuously absent from the Senate Energy and Natural Resources Committee's budget reconciliation package that was released Friday is language that would expand oil and natural gas exploration and production in the federal Outer Continental Shelf (OCS).

The budget measure, which the full committee is expected to consider on Wednesday, focuses solely on the leasing, development, production and transportation of oil and natural gas from the coastal plain of the Arctic National Wildlife Refuge (ANWR). It directs the secretary of the Interior Department to conduct two lease sales before Oct. 1, 2010. The budget package will be forwarded to the Senate Budget Committee, where it will be combined with proposals from other committees before going to the floor.

In explaining the omission of OCS language, a committee spokesman said that Chairman Pete Domenici (R-NM) believes that ANWR is "too important," and that it might be jeopardized by addressing OCS access in the budget measure. "He wants to stay focused on that [ANWR]. Including ANWR and OCS in the same measure would be just 'too ambitious.'"

Domenici is seeking to make the reconciliation package "palatable" to as many senators as possible, including those from Florida who are opposed to any expansion of drilling on the OCS, the spokesman told NGI. Many believed that the budget reconciliation process was the best vehicle for language to open up the OCS, given that it could not be filibustered.

Meanwhile, Domenici is said to be working on separate OCS legislation that would presumably be offered this year, according to Capitol Hill sources.

The House Resources Committee is expected to unveil its budget reconciliation package the week of Oct. 24. "ANWR will definitely be in there. But there has been no decision on OCS," a spokeswoman said.

In related action, the American Public Gas Association (APGA) and 14 Florida public gas systems and associations last week called on Florida Gov. Jeb Bush to work with Congress to pass a House Resources Committee bill that would provide coastal states with the authority to allow natural gas production in areas off their shores where production currently is off-limits.

The Resources Committee passed the legislation in late September, but it has held off taking the bill to the House floor until it can negotiate language that is agreeable to Florida House lawmakers (see NGI, Oct. 10).

The bill, among other things, would lift the existing federal moratoriums to allow natural gas-directed leasing on the offshore. Florida lawmakers are opposed to this provision because they fear it could bring production activities to the Sunshine State's coastline.

The APGA pointed out that the Resources Committee bill would give Florida and other coastal states more authority, not less, to control the development of resources off their coasts. Specifically, it would give Florida the authority to determine what, if any, production would take place up to 125 miles off of its coastline.

"This strikes a fair and appropriate balance that gives coastal states interested in allowing production of their offshore resources the authority to do so while giving states not interested in allowing production more authority to restrict development," the APGA and others said.

"Our consumers have waited too long for relief from high natural gas prices. This legislation is a good first step towards providing that relief and we strongly encourage you to work towards its passage in the remainder of the 109th Congress."

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