The House Tuesday defeated by voice vote a Republican amendment that sought to lift the 25-year-old congressional moratorium on oil and natural gas drilling 100 miles off U.S. coastlines.

The amendment was offered by gas drilling advocate Rep. John Peterson (R-PA) during debate on a $27.6 billion spending bill for the Interior Department, Environment and Related Agencies in fiscal year 2008.

Peterson also offered a proposal that would remove the moratorium on natural gas-only drilling 25 miles off U.S. shorelines, which drew the immediate criticism of California and Florida lawmakers. Rep. Mike Conaway (R-TX) sponsored an amendment to remove the moratorium as well. The House was expected to vote on the measures Tuesday evening.

“It is absolute insanity for America to starve itself of clean, green natural gas,” said Peterson in introducing his gas-only amendment, particularly when China is drilling 45 miles off the Florida Keys and Canada is drilling in the Great Lakes.

Rep. Lois Capps (D-CA) countered that the energy industry already has access to the best natural gas resources in the Outer Continental Shelf (OCS), and owns the drilling rights to 4,000 untapped leases in the Gulf of Mexico. She further argued that there was no such thing as gas-only drilling, and that expanded offshore drilling — if approved by Congress — would not have any immediate impact on natural gas prices.

Rep. John Mica was the only member of the Florida delegation to support Peterson’s proposal. Gas-only drilling “can be done,” he said. “We have the technology to extract it” in a safe manner. As foreign countries acquire leases in Florida’s backyard, this is a “nonsensical debate,” he said. “What a goofed-up debate and policy.”

Conaway challenged the California and Florida opponents. “Those states who do not want this drilling off their shores [should] begin to commit today to eliminate their use of natural gas,” he said. “Just simply say, ‘OK, if we’re not going to drill it offshore, then we’re not going to use it.'”

The White House has vowed to veto the House spending bill if a provision requiring producers to renegotiate their flawed 1998-1999 oil and natural gas leases is not struck. The $27.6 billion appropriations bill exceeds the spending level sought by President Bush by approximately $2 billion.

The measure includes an amendment aimed at the holders of 1998-1999 Gulf of Mexico leases. A government oversight has allowed the holders of the leases to avoid paying royalties on their production. The House provision would bar the leaseholders from bidding on future government tracts until they renegotiate the earlier leases, which lacked price thresholds (see Daily GPI, June 8).

The Senate Appropriations Committee last week struck a similar provision from a fiscal year 2008 spending bill for the Interior Department and Related Agencies (see Daily GPI, June 20).

The critical price thresholds serve as a benchmark to determine when oil and gas production becomes subject to federal royalties. Without them, producers who negotiated leases in 1998 and 1999 have been able to escape paying royalties on production up to a specific volume limit. The price caps were included in leases that were negotiated in 1996, 1997 and 2000, but were not in the 1998 and 1999 leases due to an omission on the part of Interior Department officials.

According to a report earlier this year by the Government Accountability Office, between $6.4 billion and $9.8 billion in royalties could be lost to the federal government as a result of missing price thresholds in the 1998-1999 deepwater leases (see Daily GPI, April 16).

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