The House voted by a narrow margin yesterday to retain a controversial measure that attempts to block construction of the 744-mile Gulfstream pipeline project that would transport gas from Mobile Bay, AL, across the Gulf of Mexico to Florida.

By 213 to 210, the full House rejected a proposal by key members of the Florida delegation to remove the anti-Gulfstream measure from a $24 billion Energy and Water Development Appropriations bill that was later adopted.

With the narrow victory, House lawmakers from producer states sent Florida a message: it could have Gulfstream to supply it with out-of-state natural gas, or it could continue its moratorium on offshore exploration and production, but it couldn’t have both.

The vote was a major win for the Alabama delegation, particularly Rep. Sonny Callahan (R-AL), who dropped the anti-Gulfstream measure into the spending bill earlier this week in retaliation for the Florida delegation’s move to bar drilling off the state’s coasts in an interior appropriations bill, which was passed by the full House last week. The fact that Florida House lawmakers brought the offshore drilling measure up for a floor vote when the majority of Alabama’s delegation was out of town only served to widen the rift between the two factions.

Although Callahan’s Gulfstream measure survived floor debate, it still may not make it into the final bill. Rep. C.W. “Bill” Young (R-FL), chairman of the House Appropriations Committee, has vowed to remove the section during conference on the legislation, which will probably occur in September. The Senate will begin mark-up of the bill following the July 4th recess, and it could reach the Senate floor by later this month.

Meanwhile, the House vote Thursday was a huge defeat for the Florida delegation and reflected a growing resentment among certain factions in the House, especially lawmakers from Gulf Coast states, with the Sunshine State’s continued opposition to oil and gas drilling off of its coasts.

Callahan, who is chairman of the House Appropriations Subcommittee on Energy and Water Development, called it the “height of hypocrisy” for Florida to not only want to bar offshore drilling off of its own coasts, but to block it in neighboring states along the Gulf — such as Alabama — and then favor construction of a pipeline to transport gas from the producer states for consumption in Florida.

The bill passed by the House last week would halt the Lease Sale 181 for offshore Florida that the Interior Department had scheduled for December of this year, but it would also bar offshore drilling in the entire eastern Gulf of Mexico until April 2002. Reps. Jim Davis (D) and Joe Scarborough (R), both of Florida, co-sponsored the amendment against offshore drilling. The measure faces an uncertain fate in the Senate, and is likely to be opposed by President Bush.

Although they’re opposed to offshore drilling, most of the members of the Florida delegation, led by Davis, favor importing gas over Gulfstream from adjacent states. Davis is telling Alabama “you [can] suffer but we don’t want to suffer,” Callahan said. “I don’t know how in the world we can tolerate the hypocrisy,” he remarked during an hour-long debate on the issue.

“What [Rep.] Davis said is ‘we’re going to take [natural gas] you’re already extracting because you [Alabama] have too much and we’re going to send it to Florida because they don’t have any.’ He’s right, except we don’t have too much. When we ship this natural gas out of the state of Alabama, our power rates…go up,” he noted.

For Callahan, “the issue is whether or not you [Florida] need to build a pipeline if you’re not going to permit drilling” like most of the Gulf Coast states.”

“If Alabama, Mississippi, Louisiana, Texas and Alaska want to drill for oil, God bless them,” countered Scarborough. But “Florida doesn’t want to be Louisiana. It wants to be the state of Florida,” which for years has campaigned against exploration and production off of its coasts.

“I agree Florida probably doesn’t want to become like Louisiana or Texas. I’m worried they want to become like California. They don’t want to produce” any oil and gas, countered Rep. Gene Green (D-TX).

Some of the Florida House lawmakers, however, weren’t as unyielding. Demand for natural gas to produce electricity is expected to grow by 97% in Florida by 2020, noted Rep. John Mica (R-FL). Twenty-eight of the 34 new generation plants planned for the state over the next decade will be gas-fired, he said. “Where are we going to get the natural gas? You can’t have it both ways,” he told his Florida colleagues.

“I think [Rep.] Mica is right. There’s plenty of gas, and I think we should drill for that gas. I think there’s room for compromise on drilling, but let’s not fight over this pipeline,” said Rep. Dan Miller (R-FL), through whose district Gulfstream will be routed.

With respect to the planned Lease Sale 181 for offshore Florida, “I think we need to open that up to discussion,” he noted, adding that Florida House lawmakers were caught between state Gov. Jeb Bush, an avowed opponent of Florida offshore drilling, and President Bush.

Rep. Young said the entire debate over whether or not to include Callahan’s anti-Gulfstream measure in the legislation was really “about nothing,” given that the Federal Energy Regulatory Commission already has certificated the pipeline and it has received its permits. In fact, Gulfstream plans to begin laying pipe in the Gulf this weekend.

Specifically, the Callahan amendment bars FERC from using any funds allocated under the legislation “or any other act” to “complete the remaining reviews and issue further authorizations to proceed” with the construction of the Gulfstream project. FERC issued a certificate for the $1.7 billion Gulfstream pipeline project in February. The pipeline has a targeted in-service date of June 1, 2002, and would offer Florida customers pipeline-on-pipeline competition for the first time. The market has long been dominated by a single pipeline, Florida Gas Transmission. When completed, the Gulfstream pipeline will run from Mobile Bay, AL, under the Gulf of Mexico and come ashore on the west coast of Florida near Tampa, where it will supply 1.13 Bcf/d of natural gas to an ever-expanding power generation market in the state.

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