In a moment long awaited by the energy industry and consumers, President Bush Wednesday is expected to sign into law legislation that will open up the eastern Gulf of Mexico to oil and natural gas leasing, according to Sen. Mary Landrieu’s (D-LA) office.

The signing ceremony is scheduled to take place Wednesday morning in the Old Executive Office Building, a spokesman said. Landrieu, one of the authors of the offshore leasing measure, and other proponents of the bill will attend. Before the bill was even forwarded to the White House, a group of producers last week called on lawmakers to be more aggressive next year in making others areas of the Outer Continental Shelf (OCS) available to producers for drilling.

“This bill cannot be the final answer when it comes to ensuring more access to the most economical supplies,” said Skip Horvath, president of the Natural Gas Supply Association, after Congress as part of a larger tax package (HR 6111) voted to allow drilling in the Lease Sale 181 area of the eastern Gulf. The final bill was far short of a more comprehensive offshore bill that both House Republicans and industry favored, but it represented an advancement nonetheless.

“It is vital that the 110th Congress continue to work together to ensure greater access” to the OCS, he noted. Producers, energy consumers and other OCS drilling proponents are expected to pressure Congress next year to move in this direction, but they are likely to meet resistance from Democratic leaders.

The bill is the most significant piece of energy legislation to emerge from Congress this year. It makes 8.3 million acres in the Lease Sale 181 area in the eastern Gulf and in a tract south of Lease Sale 181 available for oil and gas leasing. It would require the first lease sale to be held within one year of enactment of the bill, but actual drilling in the Lease 181 area is not expected to occur for several years.

The Republican-crafted bill also provides protections (a minimum of a 125-mile, no-drill buffer zone) for Florida and gives four Gulf coastal states a major share (37.5%) of the federal royalties from leasing to be used in restoring their receding coastal areas. It’s been estimated that the Gulf Coast states will get a total of $170 billion in revenues from drilling in 181 over a 60-year period.

Sen. Pete Domenici (R-NM), the chief architect of the Lease 181 bill, said it would bring 1.26 billion barrels of oil and 5.8 Tcf of natural gas to the market over the next several years.

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