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EPAct's OCS Inventory Still Sought

Sen. Pete Domenici (R-NM) is pressing the Minerals Management Service (MMS) for an updated inventory of the natural gas and oil resource that currently is inaccessible because of leasing moratoria on part of the Outer Continental Shelf (OCS). However, a Domenici aide conceded that Republicans face an uphill battle getting any bill through Congress this year that would open up more of the OCS to oil and gas drilling.

"No one has a clear idea of what resources are out there, and we will be talking to MMS to see what we can do to provide an assessment of what the actual oil and gas resources in the OCS [moratoria areas] are," said Marnie Funk, a spokeswoman for Domenici, the ranking member on the Senate Energy and Natural Resources Committee.

"There was a seismic survey authorized in the [Energy Policy Act of 2005], but the Department of the Interior doesn't have the money for the survey [of the 1.67 billion acre OCS]; it wasn't funded last year and likely won't be funded this year, so we are looking for ways aside from a seismic survey to get a more accurate picture of what resources we actually have out there," she said. Current data on the OCS is decades old, and a new inventory could provide states that oppose offshore drilling with a better picture of exactly what they are missing.

"I think it will certainly be challenging this year to [pass OCS legislation]," said Funk. "Sen. Domenici...would gauge the political will before introducing legislation. That is way down the road from where he is right now."

At a Senate Energy Committee hearing Thursday, representatives from the states of New Jersey and Louisiana clearly illustrated the opposing sides of the argument over opening up more of the OCS. While New Jersey wants to avoid any risk to its tourism, fishing and other coastal industries that might be posed by offshore drilling, Louisiana's drilling, tourism, fishing and industry has coexisted in its state for years, noted Marjorie Mckeithen, assistant secretary for the Louisiana Department of Natural Resources.

Sen. Mary Landrieu (D-LA) chastised New Jersey and other states that have opposed drilling off their shores for not doing more to become energy independent. She said she plans to fire off a letter to every governor in the nation asking them what they plan to do to make their states more energy independent if they are opposed to offshore drilling.

"We are proud to do the drilling, proud to lay these pipelines because we think that America does well when it has reasonable prices for energy so it can protect our troops in Iraq and lead the world in almost every area," said Landrieu during the hearing. "But as you can see most of this gas we produce goes primarily to the Northeast... We're happy to shut these pipelines down and we may decide that's what we want to do until the Northeast figures out what they can contribute to this grid.

"If you want to put windmills in every place offshore, that's fine, or build new nuclear power plants, that's great, make sure that no cars run on the street unless they are electric cars, whatever," she said. "Every part of this country has to do something... I think it is about time that every governor in every state answer the call for energy independence."

Landrieu and Rep. John Peterson (R-PA) announced plans earlier this week to craft legislation that would build on a 2006 bill that opened up an additional 8.3 million acres in the Central Gulf of Mexico to oil and natural gas drilling. The measure, dubbed "OCS II," would give coastal states the option to allow oil and gas exploration and production off their shorelines.

Both Landrieu and Peterson support setting aside a portion of the royalties from expanded offshore development to establish an alternative energy research fund. The legislation presumably also would include a provision to give states, such as Louisiana, that contribute a significant amount of resources to oil and gas development a greater portion of the federal royalties on production off of their shores (see Daily GPI, Jan. 24).

Mckeithen noted that 34% of the nation's gas supply and 30% of its oil supply is either produced in Louisiana, produced offshore Louisiana or moves through Louisiana. The state is at the top of the list when it comes to OCS oil and gas production and royalties provided to the federal government.

"We want to continue [providing the nation with energy] and we're ready to move forward as partners getting a share [of federal royalties] and not just the impact of all that activity," said Mckeithen. "Louisiana firmly believes that production and [environmental] protection can coexist. We've proved that time and time again." She noted that while Louisiana is busy providing a large part of the nation's energy, it is also busy providing 30% of its fish and promoting its tourism industry.

However, Lisa Jackson, commissioner of the New Jersey's Department of Environmental Protection, reaffirmed her state's opposition to offshore oil and gas lease sales. "Such actions leave us vulnerable to future damage, and quite frankly in our opinion in New Jersey [and many other Mid Atlantic states] our coastal economy is too important, our tourism economy is too important for us to move in the direction of exporting the oil and gas resources off of our coasts. I can only speak for New Jersey, but I think it's in the record that other Northeast states, certainly including Delaware and Connecticut, have been vocal in their opposition as well."

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