The U.S. Senate and House voted out a $19.1 billion spending package last Wednesday that dropped a controversial amendment to defer drilling in the eastern Gulf of Mexico (GOM), an area referred to as the “offshore oil and gas backbone of this country.”

House lawmakers approved the conference report on the appropriations package by a vote of 380-28, forwarding the legislation to fund the Department of Interior (DOI) and related agencies to President Bush for his signature. The Senate adopted the conference report soon afterward by a vote of 95-3.

The House backed away from its original proposal to postpone drilling in the eastern Gulf during conference with the Senate over the legislation, a Capitol Hill observer said. The House bill now parallels the Senate measure, which would permit DOI to fund activities to carry out Lease Sale 181 as it was originally sized in the Outer Continental Shelf five-year oil and gas leasing program for 1997-2002. The eastern GOM lease sale is scheduled to occur in December.

With the original House amendment now past history, offshore industry officials are hoping that the Bush administration will reconsider its decision this past summer to downsize the pending Lease Sale 181, but they seriously doubt this will occur. Mostly in response to Florida lawmakers’ opposition to drilling off the state’s coasts, Interior Secretary Gale Norton in early July cut the offshore acreage that will be available to producers in 181 by three-fourths — to 1.5 million acres from 5.9 million acres.

“We thought the administration reduced 181 in response to [the amendment that] the House passed” during the summer, said one offshore energy source, adding that was no longer a factor now. “Does this mean the administration will re-evaluate its action?”

He has little hope that this will occur. “I doubt that Secretary Norton would backtrack and expand the sale. In my heart of hearts, I think a deal has been struck” between the House and Senate Florida delegation and the Bush administration to keep the sale at its reduced size.

The offshore source believes that expanding the lease sale is especially critical in the wake of the Sept. 11 terrorist attacks. “Natural gas is a North American commodity, and we have a lot of it within our borders” that is ripe for exploration and production, if only the Bush administration would give the go-ahead, he said.

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