In the latest of a rash of energy proposals coming from Republicans, Sen. John Hoeven of North Dakota and Rep. Kevin McCarthy of California Thursday introduced legislation that calls for the Interior Department to add a lease sale off the coast of Virginia to its five-year plan, to step up permitting for energy development on federal lands, and give the go-ahead for the construction of the northern leg of the Keystone XL oil pipeline.
The measure, which was unveiled at a press briefing on Capitol Hill, calls for a lease sale to be held a 2.9 million-acre area located about 50 miles offshore Virginia in the Mid-Atlantic Planning Area. Interior's Bureau of Land Management estimates that the area may contain 130 billion bbl of oil and 1.14 Tcf of natural gas, the lawmakers said.
Hoeven and McCarthy also are proposing that coastal states receive a greater share of Outer Continental Shelf (OCS) revenues: $750,000 for the years 2023 through 2055 compared to the current level of $500,000.
The bill, known as the "Domestic Energy and Jobs Act of 2012," seeks to ensure that BLM permitting offices have the personnel and resources that are necessary to approve energy development on federal land, and it includes hard timelines on permit approvals. It gives Interior the authority to conduct Internet-based auctions for onshore leases as well.
Moreover, the measure would provide producers with access to the National Petroleum Reserve on Alaska's North Slope, and it also directs Interior and the Department of Transportation to work toward the development of pipelines and roads in the reserve.
The measure gives the green light for the construction of the northern leg of the Keystone XL oil pipeline (see Daily GPI, Feb. 28). It "deems the environmental review process complete and allows TransCanada to construct the northern leg of the pipeline immediately except in Nebraska, while the state continues its routing process within the state." The pipeline would deliver 830,000 b/d of oil to U.S. refineries, including 100,000 b/d from U.S. producers.
The Hoeven-McCarthy legislation comes one day after the House passed a Republican-sponsored bill that would expand oil and natural gas leasing in the Outer Continental Shelf during 2012-2017, and Sen. Lisa Murkowski (R-AK) offered a comprehensive offshore leasing bill (see Daily GPI, July 26).
The GOP leasing bill, which cleared the House by a vote of 253-170, proposes to offer nearly 30 lease sales for producers during the upcoming five-year period in eight OCS regions, including the Mid-Atlantic off Virginia's coast and South Carolina, Southern California, the GOM region, and Alaska's Beaufort and Chukchi seas and North Aleutian Basin. That's nearly double the lease sales that the Obama administration has proposed.
President Obama earlier this week threatened to veto the House bill (H.R. 6082), which was sponsored by Rep. Doc Hastings (R-WA), if it should make it out of Congress (see Daily GPI, July 25).
The president's five-year leasing plan was defeated on the House floor by a vote of 164-261. Despite the House vote, the administration still will be able to move forward with its leasing plan. The House vote was a "protest vote" and "symbolic" in nature, a Capitol Hill source said. "The House was registering a strong protest that they're not happy with the administration's plan."
The final administration leasing program, which was released in June and submitted to Congress for review, has come under attack from industry because it has left out the East and West coasts as leasing opportunities (see Daily GPI, June 29). Interior proposed 15 potential lease sales in six offshore areas, focusing primarily on the tried and true areas of the GOM and Alaska offshore.
The bill (S. 3438) sponsored by Murkowski, the ranking member of the Senate Energy and Natural Resources Committee, would require the Interior to hold 26 lease sales in eight OCS areas during the next five years, including two new regions -- such as the Mid-Atlantic and Southern California -- as well as the Western GOM, Central GOM, the portion of the Eastern GOM that is not subject to congressional moratorium, as well as Alaska's Chukchi and Beaufort seas, and Cook Inlet. The Mid-Atlantic would include offshore Delaware, Maryland, North Carolina and Virginia, according to the bill.
The Murkowski legislation has eight co-sponsors (four Democrats and four Republicans) and complements the Hoeven-McCarthy bill. It goes further, however, on the number of proposed lease sales and revenue-sharing, requiring that all states that allow energy production off their coasts receive 37.5% of revenues.
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