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Western Coalition Calls Rahall Bill 'Frontal Attack' on Producers

A coalition of western business interests has urged Congress to support legislation (HR 2227) that would promote oil and natural gas activity in the federal Outer Continental Shelf (OCS). At the same time it called a bill (HR 3534) sponsored by House Natural Resources Committee Chairman Nick Rahall (D-WV) a "frontal attack" on the industry and urged lawmakers to oppose it.

"We believe that offshore drilling bans are overkill. A much better approach is outlined in HR 2227," wrote Jim Sims, president of the Western Business Roundtable, which represents a broad section of western business interests, including oil and gas producers and electric power generators.

The bill, sponsored by Reps. Tim Murphy (R-PA) and Neil Abercrombie (D-HI), "seeks to make states active partners in development of offshore resources. It both grants impacted states a meaningful role in formation of resource development plans that will dictate how oil and gas exploration and development plans will occur off their coasts...and provides them a fair share of revenues derived from the production," he said.

Specifically, HR 2227 calls for expedited review of leases and sales for offshore oil and gas exploration, and would flow back federal revenues from these activities to finance clean energy and energy efficiency initiatives, including alternative fuels; the development of clean coal technology; the disposition and recycling/reprocessing of nuclear waste; and weatherization programs and conservation tax credits (see NGI, May 6).

"The roundtable has long [pleaded] with policymakers to quit politicizing energy and get serious about implementation of a thoughtful, balanced and long-term energy policy that safeguards our nation's national and economic security," Sims said.

"Among the foundations of any serious effort in that regard must be [the] establishment of robust federal leasing programs that allow for more domestic energy development (from both traditional and renewable resources), both on land and [offshore]."

Interior's Minerals Management Service (MMS) estimates that the OCS holds approximately 450 Tcf of recoverable natural gas resources and 85 billion bbl of oil. This is enough to heat all residential homes for about 93 years, and the oil would fuel 82 million cars for 35 years, he noted.

But HR 3534 "is nothing short of a frontal attack on domestic oil and gas production," Sims said in a letter to Rahall. The legislation would eliminate the royalty-in-kind program, transfer the audit and compliance functions of MMS to the Interior Office of Inspector General, combine MMS and BLM into one office, raise onshore oil and gas rental rates for the first time since the 1980s, assess a production incentive fee on existing leases that are not producing oil or gas, and repeal unnecessary royalty relief provisions (see NGI, Sept. 14).

"The roundtable urges you not to move forward with a rushed mark-up of HR 3534 in its current form. Rather we hope you will adopt a more inclusive approach," he said. The bill currently is pending before the House natural resources panel.

Sims noted that the House Blue Dog Coalition, House Western Caucus and the Republican Study Committee have "advanced a variety of [energy] proposals and principles that are worth the committee's consideration. Likewise a bipartisan group of 35 members, including a number of your committee colleagues, have sponsored HR 2227...All these policy initiatives deserve full consideration by the committee."

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