While expanded drilling in federal waters will not be addressed in the Senate Energy and Natural Resources Committee’s budget reconciliation package Wednesday, Chairman Pete Domenici (R-NM) said he will press the Bush administration to use his own powers to open up a portion of the eastern Gulf of Mexico to production activity.

It’s a “difficult political issue,” but “I’m hopeful that the president will move in this area since he has the authority” to do so, Domenici said Tuesday during a Senate energy panel hearing into the fuel supply and price situation facing consumers this winter.

Along with conservation efforts, “there is one big thing that we can do…and that’s to move ahead rapidly with Lease 181 in the coastal area between Florida and Alabama,” he said. The portion of that lease sale richest in resources was put on hold by Bush’s Interior Department secretary four years ago and could be put back into operation by the administration (see Daily GPI, July 3, 2001).

“I’m going to push the president, we’re going to push it very hard,” he told reporters following the hearing, according to a report by Dow Jones Newswires.

Domenici has been working on a proposal to open up the Outer Continental Shelf and particularly the eastern Gulf of Mexico to drilling, but he signaled Tuesday that it was unlikely that legislation would be introduced in Congress this year.

The non-leased portion of Lease 181 that is now under moratorium holds approximately 6 Tcf of gas more than 100 miles from any state coastline, according to Domenici. The American Petroleum Institutes estimates that 1 Tcf could heat one million homes for 15 years. “That is a huge contribution,” he said.

“Even though it would take a couple of years” for drilling activity to begin in the protected waters, “we have been told that it would have a dampening effect [now on prices] because it is a known commodity that could be expected,” Domenici noted.

In addition to expanded drilling in the Gulf, the American Gas Association and the Edison Electric Institute called on Congress to appropriate the full $5.1 billion in funding for the Low-Income Home Energy Assistance in fiscal 2006, and to approve emergency funding of $1 billion for this winter.

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