The House Wednesday overwhelmingly passed a Republican-sponsored bill that would expand oil and natural leasing in the Outer Continental Shelf during 2012-2017. But the victory may be short-lived because it’s unlikely that the GOP plan, which was proposed as a replacement to the Obama administration’s slimmed-down OCS leasing plan, will be voted out of Congress.
The GOP leasing bill, which cleared the House by a vote of 253-170, proposes to offer nearly 30 lease sales for producers during the upcoming five-year period in eight OCS regions, including the Mid-Atlantic off Virginia’s coast and South Carolina, Southern California, the GOM region, and Alaska’s Beaufort and Chukchi seas and North Aleutian Basin. That’s nearly double the lease sales that the Obama administration has proposed.
President Obama earlier this week threatened to veto the House bill (H.R. 6082), which was sponsored by Rep. Doc Hastings (R-WA), if it should make it out of Congress (see Daily GPI, July 25).
The president’s five-year leasing plan was defeated on the House floor by a vote of 164-261. The final leasing program, which was released in June and submitted to Congress for review, has come under attack from industry because it has left out the East and West coasts as leasing opportunities (see Daily GPI, June 29). Interior proposed 15 potential lease sales in six offshore areas, focusing primarily on the tried and true areas of the GOM and Alaska offshore.
Barry Russell, president of the Independent Petroleum Association of America, applauded the House passage of the GOP replacement plan to the Interior Department’s five-year leasing program. Interior’s current proposal, he said, “follows the same tired plan for American offshore exploration that has been pursued for more than a generation.”
In contrast, the House plan “opens new areas for exploration of our nation’s rich resource potential offshore. It allows for states that have been yearning to explore their energy potential — states like Virginia — to tap into the energy and economic renewal that has been sweeping the nation. Development of offshore oil and natural gas would revitalize coastal economies from Southern California to South Carolina,” he said.
House Republicans defeated a number of Democratic amendments — barring exports of OCS resources developed as a result of the bill, and striking a GOP provision that would require only a single environmental assessment to be conducted of all the new lease sales — that would have watered down the bill.
On the Senate side Wednesday, Sen. Lisa Murkowski of Alaska, the ranking member of the Senate Energy and Natural Resources Committee, introduced a bill that also would significantly expand the number of oil and natural gas lease sales to be offered to producers during 2012-2017.
The Murkowski bill would require the Interior Department to hold 26 lease sales in eight OCS areas during the next five years, including two new regions — such as the Mid-Atlantic and Southern California — as well as the Western GOM, Central GOM, the portion of the Eastern GOM that is not subject to congressional moratorium, as well as Alaska’s Chukchi and Beaufort seas, and Cook Inlet. The Mid-Atlantic would include offshore Delaware, Maryland, North Carolina and Virginia, according to the bill.
The Murkowski legislation would complement another Republican measure that is due to come out Thursday. That bill, to be sponsored by Sen. John Hoeven (R-ND), is expected to propose a lease sale off the coast of Virginia, raise the annual cap on federal revenues paid to states that allow offshore drilling to $750,000 from $500,000, and support the construction of the Keystone XL oil pipeline from Canada. Murkowski is co-sponsoring the Hoeven bill as well.
The Murkowski measure would expand revenue-sharing to all states that permit energy production off of their coastlines to 37.5%.
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