The Senate Energy and Natural Resources Committee last Tuesday approved a Democratic measure that would bring oil and natural gas leasing closer to the Florida coastline. Although strongly supported by producers, the proposal could threaten the entire energy bill when it reaches the Senate floor.
By 13-10, the Senate panel voted out the amendment of Sen. Byron Dorgan of North Dakota, which would permit oil and gas activity in the eastern Gulf of Mexico (GOM) 45 miles off of Florida's west coast and even closer off the Florida Panhandle (10 miles) in the gas-rich Destin Dome. Sen. Bill Nelson (D-FL), an avowed opponent of drilling near the Florida shoreline, has threatened to filibuster the omnibus energy bill, which advances many of President Obama's energy priorities, if the proposal stays in the legislation.
"Mark my words, I will continue to fight to ensure any legislation bringing drilling within 10 miles of Florida's Gulf Coast will not see the light of day here in the Senate," Nelson said last Wednesday.
Even supporters of offshore drilling, Sens. Lisa Murkowski (R-AK) and Mary Landrieu (D-LA), voted against the Dorgan amendment because it lacked language that would allow coastal states, which open their shores to production, to share revenues with the federal government. Senate Energy Committee Chairman Jeff Bingaman (D-NM), who voted in favor of the Dorgan proposal, opposes sharing revenues with individual coastal states. He believes the Outer Continental Shelf belongs to the entire country and that revenues should go to the U.S. Treasury.
The Dorgan amendment shrinks the no-drill buffer zone for Florida by 64%, from 125 miles to 45 miles or less. The 125-mile, no-drill buffer zone for Florida was established in an energy bill passed by Congress in December 2006 (see NGI, Dec. 25, 2006).
Landrieu proposed a second amendment to Dorgan's to add revenue sharing of 37.5% for coastal states, but it was defeated by 13-10. She said she and other senators plan to propose a "strong revenue-sharing model" on the Senate floor.
Murkowski was successful in passing an amendment that would speed leasing in the eastern GOM. Her proposal would require the Interior secretary to include in future lease sales the areas lifted from moratoria by the Dorgan amendment within 180 days after the completion of all necessary environmental impact studies.
The Independent Petroleum Association of America (IPAA), which represents independent oil and gas producers, commended the committee for its action on the Dorgan proposal. "In the eastern Gulf, we're talking about an area with trillions of cubic feet of American gas, and potentially billions of barrels of American oil. And the best part is: every bit of it resides in areas in proximity to existing pipelines and needed infrastructure," said IPAA President Barry Russell.
The Dorgan amendment will be included in the oil and gas title of the broad energy bill, which the committee had planned to complete last week but was unable to due to scheduling conflicts. It said it expects to finish mark-up and vote out the energy bill to the Senate floor on either Tuesday or Wednesday of this week.
The omnibus bill contains a number of controversial issues and will be fiercely debated in the Senate. In addition to expanding access to the offshore, the measure has a watered down renewable electricity standard of 15% by 2021; would expand the Federal Energy Regulatory Commission's backstop authority over transmission; would give FERC the authority to order a company to cease and desist from violations or threatened violations; and would require the Energy Information Administration to develop a plan to collect information on the ownership of all commercially held oil and natural gas inventories in the country, among other things.
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