House Gives Resounding 'No' to Offshore FL Drilling

Oil and natural gas producers were dealt a major, unexpected blow last Thursday when the Republican-controlled House voted by an overwhelming majority to block exploration off the coast of Florida and to exclude new drilling in millions of acres of national monuments.

This action, which was part of a larger Interior appropriations bill that was approved by House lawmakers later, would curtail offshore drilling in the wider eastern Gulf of Mexico until April 2002, and would put a halt to the controversial Lease Sale 181 in offshore Florida that the Interior Department has scheduled for December. "This was not a great sign for the gas industry," lamented one source.

The House vote was both unexpected and a "major disappointment," said Thomas Michels, a spokesman for the National Ocean Industries Association (NOIA), which represents the entire offshore industry. "We basically thought that this lease sale [181] sold itself."

Given the maturity of the production fields in the western Gulf, this "could abort our last best source of natural gas" in the United States, Michels told NGI. "It's nearly criminal in terms of what it could do to the energy markets," if the Senate takes similar action.

The vote also represents a stinging setback for President Bush and his national energy strategy, which calls for the Interior Department to continue with its planned offshore lease sale schedule, including the controversial Lease Sale 181. The lease sale pits Bush against his brother, Florida Gov. Jeb Bush, who is opposed to oil and gas being produced near the state's shoreline. Lease Sale 181, say critics, would reach bring drilling activity within 30 miles of Pensacola and 200 miles of Tampa Bay.

The anti-drilling amendment was sponsored by Reps. Jim Davis (D-FL) and Joseph Scarborough (R-FL). The fate of a companion measure in the Democrat-controlled Senate is unknown at this point. There's "definitely support for 181 in the Senate," said Michels, but there's also "a lot of opposition."

President Bush "would have a big problem" in signing any legislation that would derail leasing off the coast of Florida and elsewhere in the eastern Gulf, given his campaign promises in support of offshore drilling and the pledges made in his national energy strategy, said a Washington energy observer.

"I would hope the president wouldn't sign a measure against 181," Michels said. "He's clearly demonstrated a keen understanding for the need to boost our domestic supplies. This is the clearest example of an area that has all the infrastructure in place. We could bring that natural gas and oil on line in a year or so. If he wants to boost supply, this is the way to do it."

If anything, the House vote should propel the energy industry into action, the energy observer noted. "I think the energy industry needs to work on making a case for why developing new natural gas resources is important to the energy needs of the country."

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