Sen. John Warner (R-VA) offered an amendment Thursday that would allow Virginia to explore and drill for natural gas off of the state's coastline, but Sen. Robert Menendez (D-NJ) countered with a second-degree amendment that could block Virginia from moving forward. The measures are being considered as part of the broad energy bill (HR 56) being debated on the Senate floor, which had not been voted on as of press time Thursday.

Warner's measure seeks to allow Virginia, providing the governor and General Assembly agree, to petition the Interior Department for a waiver of the congressional moratorium on exploration off of the state's coast. If natural gas is discovered, Virginia's governor would be required to go back to the General Assembly and work with Interior on the extraction of gas reserves, Warner said.

Both Gov. Timothy Kaine and the state's General Assembly have expressed "a measure of support" for natural gas exploration, Warner said. He noted that the Virginia General Assembly already has passed legislation in support of natural gas exploration (see Daily GPI, April 10, 2006).

The Warner amendment would require Interior to give neighboring coastal states the right to comment on Virginia's petition. It also would allow Interior to deny Virginia's petition if the Department of Defense determines that it would conflict with military and training exercises off the Virginia coast. And it provides that Virginia would get 37.5% of royalties, and that 6.25% of royalties would be placed into a fund for mitigating any potential damage to neighboring states caused by gas activity off of Virginia's coastline, Warner said.

"This [measure] is natural gas only," and would not permit exploration and production of crude oil, he noted.

The second-degree amendment of Menendez calls for the Interior secretary to reject Virginia's request unless it gets the approval of the governors of all the states within 100 miles of the coastal waters of Virginia. "You've gone to the extreme. You [put] absolute power" in the hands of neighboring coastal states, Warner said. "Other states have been accorded this right [to explore and drill]. Why deny my state?"

Menendez said his measure allows Virginia to move forward, but it requires the state to do so "in concert" with neighboring states that could be affected by Virginia's petition. Sen. Ben Cardin of Maryland, a neighboring state, objected to Warner's proposal as well, saying "gas drilling presents an unacceptable risk."

Menendez said a moratorium waiver for Virginia could result in a "domino effect" that would eventually undo the entire congressional moratorium. "Any drilling on the Mid-Atlantic puts us on a slippery slope" to having oil rigs dot the entire coastline, he noted. And to say "we're only going to drill for gas...is, in fact, rather ludicrous...There's always the possibility that oil could be found."

After being in effect for 25 years, Warner said it was time for Congress to "reexamine [the] existing framework" of the moratorium, particularly in light of higher energy prices.

The American Chemistry Council (ACC) opposed the Menendez amendment. "New Jersey has more than 70,000 chemical industry employees -- 21% of the state's manufacturing base," yet the amendment proposed by Menendez would be a "job killer" for his home state, said ACC CEO Jack N. Gerard.

The amendment is "at odds with the goals" of the Senate energy bill -- energy independence, lower energy prices and greenhouse gas reductions, he said. "Without domestic natural gas supply, these are empty promises," Gerard noted.

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