As the oil and natural gas industries took a beating in the Senate and House tax-writing committees this week, Reps. John Peterson (R-PA) and Neil Abercrombie (D-HI) provided producers a ray of optimism. The two lawmakers introduced legislation Wednesday that would remove the congressional ban on natural gas exploration and production in much of the Outer Continental Shelf (OCS).

The NEED Act (HR 2784) seeks to lift the congressional and presidential moratoria on offshore natural gas production, giving the states the right to drill off their coastlines. Under the measure, gas activity would be barred within the first 100 miles off of a state’s shoreline, while drilling would be permitted beyond that mark upon the bill’s enactment.

The bill would direct revenues to producing states, various environmental restoration projects across the county, the Low-Income Heating Energy Assistance Program, weatherization programs and research and development for alternative and renewable energy, according to Peterson spokesman Travis Windle.

“What makes this bill so different than other ‘energy’ bills is that it actually produces energy, while encouraging the protection and continued safeguard” of the environment, Peterson noted. The Independent Petroleum Association of America, which represents independent oil and gas producers, has already endorsed the measure.

This is the second time that Peterson will try to push through Congress legislation favorable to offshore energy drilling. Last year the House approved a bill to open historically closed portions of the federal OCS to oil and gas drilling, but it never made it through the Senate (see Daily GPI, June 30, 2006). The Senate instead passed, and President Bush signed into law, narrower legislation to open more of the Gulf of Mexico to leasing (see Daily GPI, Dec. 21, 2006).

Peterson and Abercrombie will face a tough time selling their legislation in a Democratic Congress, which has placed oil and gas issues on the back burner this year.

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