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VA Governor Takes Neutral Position on Drilling Off State's Coast; Both Sides Claim Victory

Virginia Gov. Timothy Kaine Friday did not veto legislation that eventually could allow natural gas development off the state's coastline, but instead he adopted a neutral stance.

The Democratic governor plans to offer a substitute bill that "does not take a position" on whether the federal ban on natural gas development should be lifted to allow exploration and production off of Virginia's shores. Environmentalists opposed to offshore drilling saw Kaine's announcement as a major victory, while the sponsor of the bill, state Sen. Frank Wagner (R-VA), and other drilling advocates viewed it as a win also.

"I'll be the first to admit that it doesn't go as far as I wanted, but it's a huge step," Wagner told NGI. "I believe that Virginia is the first of any state to take a neutral position" on the issue of opening their coastline to offshore drilling, he said, adding that other states have rejected the idea outright. Wagner said Kaine also has expressed support to keep Virginia in the draft environmental impact statement that the Interior Department is conducting for its five-year (2007-2012) plan on leasing in the Outer Continental Shelf (OCS), including off the coast of Virginia. This language will be part of the Wagner bill.

Kaine did not veto the bill (SB 262) outright because he "did not want to preclude or close the door" on potential offshore energy development in the future, said Delacey Skinner, a spokeswoman for the governor.

The Virginia Chapter of the Sierra Club applauded Kaine's action. "The idea that Virginia would be the key to opening America's coasts to the oil and gas industry was rejected today," said Michael Town, the chapter's director.

In his statement, Kaine signaled his support for exploratory drilling, Wagner noted. "My substitute limits the bill's discussion of offshore natural [gas] resources to supporting federal efforts to determine how much gas is 50 or more miles off the Atlantic Coast. Before any meaningful discussion of offshore drilling [can occur at the state level], there must be some sense of the potential size of the natural gas reserve," Kaine said Friday. Town called the governor's support for exploratory drilling a "slippery slope that could increase the pressure to drill" off the Virginia coastline.

Absent information on the size of the gas reserves offshore Virginia, "it is impossible to fairly weigh the benefits of offshore energy against the numerous concerns expressed by the public. Thus, my substitute does not take a position on lifting the federal moratorium on natural gas production or development, which is a question of federal, not state law," Kaine said.

With those words, Kaine carved out a chunk of the comprehensive energy bill that was adopted by Virginia's House of Delegates and Senate earlier this year. Wagner's bill called for Virginia's congressional delegation to seek an exemption from the decades-old federal moratorium on drilling off the East Coast. Kaine's measure would replace the provision with language that supports federal efforts to gather information on gas development offshore Virginia, and that seeks information on the potential costs, environmental impacts, and the possible effects on naval training and flight patterns, said Skinner.

One member of the Virginia congressional delegation, Republican Sen. John Warner, already has introduced legislation that seeks to encourage more gas leasing by giving the governors of energy-friendly states the opportunity to exit from the federal moratorium on drilling in certain parts of the OCS.

There has been little or no activity on the Warner bill in the U.S. Senate yet. Most of the focus has been on a bill, proposed by Sens. Pete Domenici (R-NM) and Jeff Bingaman (D-NM), that would open up more acreage in the gas-rich Lease 181 in the eastern Gulf of Mexico to gas development.

Aside from the issue of offshore drilling, Kaine said his substitute bill would strengthen state energy policy, promote energy efficiency in appliances and state buildings, and reinstate a more accurate method of determining energy costs in utility fuel rate hearings.

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