Oil and gas development scored a strikeout Thursday as the U.S. House Appropriations Committee knocked out a proposed amendment to narrow the offshore ban on natural gas drilling and development from 50 miles off U.S. coasts to 25 miles; added language to the bill's accompanying report calling for an additional environmental study of Alaska's Bristol Bay area before leasing; and recommended that holders of less restrictive 1998-1999 Gulf of Mexico leases renegotiate those leases or be prohibited from bidding on new leases.
The amendment to the House Interior Department appropriations bill, offered by Rep. John Peterson (R-PA) was just one prong of his attempt to expand the offshore area available for natural gas drilling. The measure was defeated 39-25. Peterson still plans to offer a separate bill to expand offshore drilling for gas (see Daily GPI, June 6). A spokesman for the congressman pointed out that because of the restriction on adding legislation into an appropriations bill, the amendment offered Thursday was a stripped-down, "very carefully worded" version of the bill that will be offered sometime in the next two weeks.
Meanwhile, Rep. Maurice Hinchey (D-NY) added language to the report that will accompany the appropriations measure calling for more environmental studies of the potential impacts of drilling in Bristol Bay in Alaska's North Aleutian Basin, reported to be rich in natural gas reserves. Hinchey proposes that the Minerals Management Service (MMS), the U.S. Geological Survey and the Government Accountability Office (GAO) all get involved in the study. This would further delay MMS leasing of the area. The vote on this measure was 33-30.
Hinchey also sponsored an amendment aimed at the holders of 1998-99 Gulf of Mexico leases, which, due to a government oversight, allow the payment of lower royalties. The measure, which passed the House earlier but didn't make it through the Senate, would exclude the leaseholders from bidding on additional tracts until they renegotiated the earlier leases (see Daily GPI, March 1).
According to a report earlier this year by the GAO, 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 1998 and 1999 deepwater oil and natural gas leases (see Daily GPI, April 16).
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