Key Senate members of the Florida delegation weren’t ready to declare a full victory after the Bush administration, in a compromise gesture earlier this week, significantly scaled back plans to allow oil and natural gas drilling in the eastern Gulf of Mexico.

They contend the administration’s proposal to downsize the amount of acreage available for oil and gas leasing still will give producers a toehold in the eastern planning region of the Gulf that they didn’t possess before, and could clear the way for increased drilling activity in the offshore region in the future.

While this “appears to be a partial victory” for Florida, “I remain concerned about the 1.5 million acres still slated for lease and the possibility that this foreshadows further drilling and exploration activity,” said Sen. Bob Graham (D-FL). The Interior Department on Monday slashed the size of the offshore area and number of blocks on which producers can bid during the upcoming Lease Sale 181 — to 1.5 million acres (256 blocks) from the originally proposed 5.9 million acres (1,033 blocks).

Nevertheless, “the threat to our beaches is still imminent,” Graham said. “There are 105 outstanding lease blocks in the eastern Gulf. The Destin Dome, for example, is approximately 20 miles away from Pensacola. The only way to rid Florida of this specter is to buyback those looming leases” from producers.

The administration’s proposal for a scaled-back lease sale will put a crimp in producers’ plans to drill what is believed to be a promising oil and natural gas region. The sale, which is scheduled for December, will be the first one in the eastern Gulf since 1988.

The compromise on the controversial lease sale, which would keep drilling activity at least 100 miles away from Florida’s coastline, is “unacceptable,” said Dan McLaughlin, a spokesman for Sen. Bill Nelson (D-FL). “One could see it as a victory for Florida, or the first time that oil companies will be allowed to invade the eastern planning area. As far as being a threat to Florida, we don’t see that much has changed.”

The Interior Department compromise “puts 1.5 million acres up for grabs by oil companies…and still is within close proximity to the Florida coast,” he said.

As the debate over offshore drilling moves to the Senate, Nelson is considering offering an amendment to a Senate Interior appropriations bill that would block the spending of federal dollars to carry out the lease sales in tract 181, noted McLaughlin. “That is the plan that’s on the table. [But] it is not completely firmed up,” he said, adding that Interior’s proposal for a downsized Lease Sale 181 “changes the landscape somewhat.”

As another option, he said the Senate will consider adopting an amendment passed by the House last month, which would suspend lease sales in the entire eastern Gulf — including Lease Sale 181 — until April 2002.

Rep. Sonny Callahan (R-AL), chairman of the House Appropriations subcommittee on energy and water development, opposed the House action because the initiative, which was sponsored by Reps. Jim Davis and Joe Scarborough of Florida, would block drilling activity in parts of offshore Alabama as well as off the coast of Florida. Callahan, in retaliation, proposed an amendment to hold up construction of the Alabama-to-Florida Gulfstream Natural Gas System, which passed the full House last week.

Callahan is “disappointed that such a huge chunk [of acreage] has been taken off the table” for leasing in the eastern Gulf, but he believes the Bush administration made a “good faith effort” in trying to reach a compromise with Florida, said Joe Bonner, Callahan’s chief of staff.

The Alabama lawmaker hopes this will allow oil and gas leasing to go forward in the eastern Gulf, albeit on a reduced scale, and that the Bush administration “won’t rule out the possibility” of returning to the original 181 tract in the future, Bonner noted. The latter doesn’t seem very likely. The Interior Department has agreed to bar all drilling within 100 miles of both Florida and Alabama until at least 2007.

The administration has made a “very generous concession to the state of Florida,” he said. This action “should have appeased lawmakers in Florida” and “put to rest any reasonable concerns” that the state might have about drilling in its backyard.

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