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House Subcommittee Dems Reject Repeal of OCS Leasing Ban

A Republican proposal to lift the 27-year-old ban on oil and natural gas leasing on most of the federal Outer Continental Shelf (OCS) was met with a wall of opposition from Democrats last Wednesday.

By 9-6, the House Interior Appropriations Subcommittee failed to approve an amendment offered by Rep. John Peterson (R-PA) as part of the Department of Interior and related agencies' spending bill for fiscal year 2009. The vote broke down along party lines, with every Democrat on the subcommittee opposing the amendment. The measure sought to remove the congressional moratorium on oil and natural gas preleasing, leasing and associated activities in areas 50-200 miles from the East and West Coasts, as well as in the eastern Gulf of Mexico.

Peterson, an avowed proponent of opening up federally protected waters to expanded drilling, said he plans to offer the amendment again when the full Appropriations Committee marks up the spending bill this week.

The House lawmaker has tried repeatedly in the past to remove the congressional ban on offshore leasing, which is routinely renewed each year as part of the Interior appropriations bill.

Peterson enjoyed some success in May 2006 when the House Appropriations Committee voted to repeal the drilling moratorium after the subcommitte rejected his proposal (see NGI, May 15, 2006). The House a month later voted out comprehensive legislation to open the historically closed portions of the OCS (see NGI, July 3, 2006). But the measure met with some resistance in the Senate, which ended up voting out a narrower bill to open acreage in the eastern Gulf (see NGI, Dec. 25, 2006).

The decision to reject the Peterson amendment is a "stunning missed opportunity," said Jack N. Gerard, president of the American Chemistry Council. "We sorely need to get beyond partisan politics to sound policy. Failed U.S. energy policy has played a key role in bringing about the energy crisis we find ourselves in today," he noted.

"The fact that U.S. natural gas prices have skyrocketed 460% since 2000 has hit the business of chemistry hard. Our energy costs have tripled from $25 billion in 1999 to $72 billion in 2007 and we've lost nearly 120,000 well-paying jobs, many of them to other nations where natural gas costs far less."

The American Public Gas Association (APGA), which represents municipal gas utilities, also expressed disappointment with the vote. "Later this winter, when consumers pay for natural gas now being placed in storage in excess of $12, about twice the price of this time last year, American consumers may well remember this vote," said APGA President Bert Kalisch.

House Republican Whip Roy Blunt of Missouri decried the subcommittee vote as well. "In voting to keep America's vast deep-sea energy reserves under lock and key, Democrats on the subcommittee today may have been voting in line with their leadership, but they certainly weren't voting in line with the 104 million American families struggling to make ends meet in a world of $135 oil, $4.05 gasoline and nearly $5 diesel," he said.

"What these politicians fail to understand is that these abundant deep-sea energy resources don't belong to Congress -- they belong to the American people. Unfortunately for the last 27 years, Congress has prevented the American public from accessing them, and today's outrageous energy prices are in part the result of it."

In addition to the offshore, production is prohibited on many federal onshore lands in the United States. The Interior Department released a report in May that estimated 60% of the 279 million federal onshore acres that have oil and natural gas potential are off limits to leasing (see NGI, May 26).

The report, which was congressionally mandated, estimated that 31 billion bbls of crude oil and 231 Tcf of natural gas resources were located on the 279 million federal onshore acres, mostly in the West. However, it noted that 62% of the 31 billion bbl of crude oil was inaccessible, meaning that congressional or administrative actions prohibited the development of the resources. The report further said that 41% of the 231 Tcf of undeveloped gas on federal lands was off limits to leasing.

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