Chemical producers, who have been rocked by escalating natural gas prices, called on the Bush administration this week to lift the restrictions on oil and natural gas drilling in much of the federal Outer Continental Shelf (OCS).

The American Chemistry Council’s (ACC) plea came as the Interior Department’s Minerals Management Service (MMS) announced that it is seeking public comment on the development of a five-year plan (2007-2012) for leasing on the OCS, including whether existing moratoria should be “modified or expanded” to allow interested states to permit leasing off their coasts (see Daily GPI, Aug. 23).

“Given that MMS has a legal obligation to meet the nation’s energy needs, we expect the agency to fulfill that obligation by making as much gas as possible available for development,” the ACC said in a statement issued Tuesday. “The current policy of keeping more than 85% of the OCS off-limits to energy development is causing major harm to businesses and individuals.”

The group estimated that restrictions on U.S. gas exploration have contributed to the loss of $50 billion in chemistry industry sales and the disappearance of 100,000 jobs.

The ACC said it supported the Bush administration for initiating a “public dialogue” on the issue. “The areas of the OCS being considered for leasing are among the largest untapped reserves of natural gas in the continental U.S. And because they are located near existing infrastructure, they can be developed relatively quickly so that new natural gas supplies can be brought to market in a timely fashion.”

The American Gas Association, which represents local gas distribution companies, echoed the ACC’s plea earlier this week, noting that opening up more of the OCS to gas production was crucial as gas futures prices surpass $10/Mcf (see Daily GPI, Aug. 24).

Republican leaders in Congress reportedly are considering offering a proposal to make more of the OCS accessible to producers as part of the filibuster-proof reconciliation process when they return after Labor Day (see Daily GPI, Aug. 23).

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