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Virginia Continues Push for Offshore Lease Sale

In a move that he said provides a clear statement that Virginia supports oil and natural gas exploration, development and production 50 miles or more off its coast, Gov. Bob McDonnell has signed legislation allocating future offshore royalties and revenues to transportation and the Virginia Coastal Energy Research Consortium, which researches and develops renewable energy solutions.

"These key pieces of legislation are necessary to help Virginia become the energy capital of the East Coast," McDonnel said during a signing ceremony in Richmond Wednesday. "Virginians understand that this commonsense policy will lead to millions of dollars in revenue as well as thousands of new jobs. Revenue gained from offshore exploration will go directly to two key areas, transportation and energy research and development...by investing 20% in renewable energy research and production we will ensure that energy sources of the future, such as wind and biofuels, are made more commercially practicable."

McDonnell, a Republican, made it clear before taking office that he would push for exploration and development of oil and natural gas resources off the Atlantic Coast, urging Interior Department Secretary Ken Salazar not to delay further the Virginia offshore lease sale scheduled for next year (Lease Sale 220) (see Daily GPI, Dec. 30, 2009). Virginia Sens. Jim Webb and Mark R. Warner have also called on Salazar to ensure that Lease Sale 220 remains on track for 2011 (see Daily GPI, Jan. 29). McDonnell, Virginia's former attorney general, replaced as governor Democrat Tim Kaine, who had urged a delay of offshore leasing. Their divergent views on offshore leasing was an issue in the gubernatorial campaign (see Daily GPI, March 6, 2009).

"It's clear that the policy of the Commonwealth is to support both oil and natural gas exploration, development, and production," McDonnell said. "This is an issue with bipartisan consensus. Both of Virginia's U.S. senators and most of our congressmen agree that environmentally safe offshore energy development is a matter of national and economic security. In addition, we're sending an important message that we are ready to go, and there should be no reason for Washington to delay the approval of the offshore lease sale and eventually exploration and drilling."

The Virginia lease sale would be the first conducted off the East Coast in nearly three decades (see Daily GPI, Nov. 13, 2008). The proposed sale area, which is at least 50 miles offshore and covers 2.9 million acres in water depths of 100 feet to 10,000 feet, is estimated to contain 1.14 Tcf of natural gas and 130 million bbl of crude oil, according to Interior's Minerals Management Service.

The start of the process for leasing offshore Virginia became possible when President Bush in July 2008 lifted the presidential ban that placed the East and West coasts and parts of the eastern Gulf of Mexico off limits to leasing and drilling activity, and the congressional moratorium on leasing in those areas expired on Oct. 1, 2008, leaving the Atlantic Outer Continental Shelf (OCS) free of restrictions for the first time in decades (see Daily GPI, Sept. 30, 2008; July 15, 2008).

In January the Interior Department requested request comments on the environmental impact of conducting seismic studies of exploring the OCS, the first step toward allowing seismic studies of the oil and natural gas resource potential in federal waters off the Atlantic Seaboard (see Daily GPI, Jan. 27).

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