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Senate Bill Seeks to Spur More Coastal Gas Production

Two senators introduced legislation last Wednesday that would give coastal states the flexibility to opt out of a moratorium on energy exploration and production in protected federal offshore areas.

The bipartisan bill, sponsored by Sens. John Warner (R-VA) and Mark Pryor (D-AR), seeks to encourage more natural gas leasing by giving governors of energy-friendly coastal states the opportunity to exit from the presidential moratorium on drilling in certain parts of the Outer Continental Shelf (OCS) beginning in 2007. And for states that oppose offshore development, the measure would allow them to extend the existing moratorium beyond its 2012 expiration date.

The legislation, known as the "Reliable and Affordable Natural Gas Reform Act," would ban production within 100 miles of the coasts of Florida and California, both of which are hostile to offshore drilling. It also would allow for existing leases within 100 miles to be repurchased by the Department of Interior or swapped for leases elsewhere on the OCS, according to Pryor's office.

Moreover, the measure calls for coastal states that opt out of the moratorium to receive a greater share of the revenues from leasing off their shorelines. Currently, states that engage in offshore production receive less than 1% of the revenues, while the federal government gets the lion's share.

The bill is broader in scope than the measure proposed this month by Sens. Pete Domenici (R-NM) and Jeff Bingaman (D-NM), which is focused exclusively on opening parts of the gas-rich area known as Lease 181 in the eastern Gulf of Mexico (see related story). As chairman of the Senate Energy and Natural Resources Committee, Domenici believes his proposal to open up a limited portion of protected federal offshore lands has a better chance of clearing Congress this year than a bill seeking to address drilling in the entire OCS.

The Warner-Pryor bill bears a striking similarity to a proposal offered by House Resources Committee Chairman Richard Pombo (R-CA) last year. It was voted out of committee, but never made it to the House floor for a vote.

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