U.S. Sens. Pete Domenici (R-NM), Jeff Bingaman (D-NM), Jim Talent (R-MO) and Byron Dorgan (D-ND) have launched a counterattack on the issue of drilling in the eastern Gulf of Mexico, introducing legislation Tuesday instructing the Secretary of the Interior to develop an oil and gas leasing program for Lease Area 181 that can extend up to a line 100 miles off the Florida Coast and west of the Military Mission Line.

The lease program, which must begin within a year after the bill is passed into law, would bring nearly 5 Tcf of natural gas to market in the near future, according to estimates by the Minerals Management Service. That is enough gas to heat nearly five million homes for 15 years.

The 100-mile exclusion includes the area commonly known as “the Stovepipe.” The bill also places special conditions on any leasing east of the Military Mission Line. Leasing in that area can only proceed with the permission of the Secretary of Defense and only after he has reviewed proposed lease conditions to make certain the lease does not interfere with military activities in the area. The Senate Energy & Natural Resources Committee will hold a hearing on the bill later this month.

“This bill does not in any way alter the moratorium law on the OCS. The areas cited in this bill are not under moratorium,” Domenici said. “This bill will not interfere with the viewscapes from the coast, the environment or the military activity in the area. Opening this area is our best opportunity to bring a lot of gas to market swiftly and make a real difference with supply and price.

“Natural gas prices have been climbing steadily for six years. [Futures] prices peaked at [$15.78/MMBtu] seven weeks ago. Prices have fallen since because of warm weather, but they have been climbing steadily since 2000. In 2005, the average price for gas was almost double what it was in 2004. This bill will make a real difference in the prices people pay to heat their homes and run their businesses. America has a choice. We can have affordable natural gas or we can continue to bury our heads in the sand while our utility bills soar, farmers can’t afford to fertilize their fields and our manufacturing jobs continue to migrate overseas. I choose to act.”

The bill runs counter to legislation revealed last week by Florida Sens. Bill Nelson, a Democrat, and Mel Martinez, a Republican, which would permanently ban oil and gas drilling in waters ranging from 150 miles to 260 miles off the shores of the Sunshine State. The prohibition would stay in place even after the existing presidential and congressional moratoriums against drilling in the eastern Gulf expire (see Daily GPI, Feb. 1).

The Nelson-Martinez measure “in part” is a response to the new administrative lines drawn by the Interior Department in the eastern Gulf that Nelson’s office contends would give energy-friendly Louisiana and Alabama control over waters that are close to Florida’s shores, including portions of the gas-rich Lease 181, the aide said. Nelson, as well as other members of Florida’s congressional delegation, believe Interior plans to use the boundary changes to open up a greater portion of Lease 181 in its upcoming five-year leasing plan for 2007-2012.

The boundary changes were published by MMS in the Jan. 3 issue of the Federal Register (see Daily GPI, Jan. 10). Interior is expected to issue its draft five-year leasing plan soon.

Florida saw the boundary changes as “the latest threat to the state,” a congressional staffer said. In addition, he said Florida was concerned by all the efforts in Congress last year to open up the entire Gulf to natural gas drilling. And lastly, he noted that the administrative agreement keeping the eastern Gulf, and most of Lease 181, closed to drilling is set to expire in 2007.

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