The House last week voted overwhelmingly to approve an amendment to an Interior Department spending bill that would block new oil and natural gas drilling on 36 disputed leases off the central coast of California.

The amendment, sponsored by Reps. Lois Capps and George Miller, both of California, and Nick J. Rahall of West Virginia, the ranking Democrat on the House Resources Committee, handily passed by a vote of 252 to 172 to be included in the overall Interior appropriations bill for fiscal 2003, which also won House approval. The proposal specifically would prohibit the use of any federal monies for one year to carry out drilling on the undeveloped leases off the coast of Santa Barbara, San Luis Obispo and Ventura Counties.

“Our amendment is premised on seeking equity for all parties involved — for the people of…California who want to protect their shoreline and their economy,” and for the producers holding the 36 leases, who have been “left holding the bag with these stranded investments in some cases for three decades now,” said Rahall at a press conference last week.

“Having purchased these leases between 1968 and 1984, these [producers] have become so aggravated over not being able to proceed with development for one reason or another that they filed a breach-of-contract suit against the federal government earlier this year,” he noted. “In my view, it is time to come to grips with this controversy, to own up to the fact that these 36 leases will probably never be developed and work out a sensible solution.

After working with a number of the leaseholders for years, Capps said she believes the producers “would abandon development if adequate terms were offered.”

Rahall, Capps and Miller are hoping their amendment will serve as a springboard to a settlement between the oil/gas leaseholders and the federal and state governments. “We applaud what President Bush recently did for his brother in Florida [Gov. Jeb Bush] in a similar situation — announcing the buyback of certain federal oil and gas leases that sparked controversy in that state. We are simply seeking the same treatment for California as well,” Rahall said.

However, Interior Secretary Gale Norton told California officials in June that the federal government would not buy back leases along the state’s coast, as it had agreed to do for Florida in late May. She noted the circumstances in the two states were markedly different. While Florida’s ban against offshore drilling has been in effect for years, she said California has permitted drilling in its waters in the past.

Elsewhere on Capitol Hill, the House Resources’ Energy and Mineral Resources Subcommittee last week pledged to work with the House Energy and Commerce Committee to develop legislation to provide coastal states with a portion of the royalties derived from oil and natural gas production in federal waters.

At an oversight hearing Tuesday, Subcommittee Chairwoman Rep. Barbara Cubin (R-WY) said she would work with Energy and Commerce Chairman W.J. “Billy” Tauzin (R-LA) “at least on the concept” of compensating the coastal states with a share of the royalties, said Resources Committee spokesman Matt Streit. “She’s aware of Tauzin’s concerns, and will be more than happy to work with him,” but he noted that no legislation was being drafted yet.

Tauzin believes coastal states, such as Louisiana, Texas, Mississippi and Alabama, that “are contributing to the energy needs of the nation should be adequately compensated” for allowing production to proceed off their shores, Streit said.

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