In what was good news for oil and natural gas producers, the Senate on Thursday voted to retain a section in the broad energy bill that calls for the Department of Interior to conduct a major inventory of potential oil and gas resources on the Outer Continental Shelf (OCS), including those in coastal areas where drilling has been banned by Congress for the past 20 years.

By a vote of 54 to 44, the Senate opponents successfully fought off an amendment sponsored by Sen. Robert Graham (D-FL) that sought to purge the inventory provision from the comprehensive bill now being debated. An identical proposal favoring an offshore oil and gas inventory was struck from the House energy bill that was passed in April, which means the issue will have to be reconciled in conference.

The Senate’s action was a key setback for environmentalists and lawmakers from coastal states, who claimed the inventory study was an attempt to “undermine the moratorium” on drilling off the Florida, California and the Atlantic coasts. In addition to the inventory, the Senate measure would require Interior to report on the “impediments” to developing offshore oil and gas, including the role of coastal states and localities, as well as the moratoria.

Inventorying OCS oil and gas reserves “doesn’t make sense unless you want to overturn the moratoria,” said Sen. Dianne Feinstein (D-CA), a co-sponsor of the Graham amendment.

This “is an inventory…not a license to produce,” countered Sen. Craig Thomas (R-WY) during the debate on the Senate floor Thursday. It is “completely untrue” the inventory will “open the door” to drilling in OCS areas that are under congressional moratoria, he said.

“Why is there so much resistance” to conducting an inventory, especially at a time when “we are facing a natural gas crisis,” asked Sen. James Inhofe (R-OK). Other proponents of the inventory recited the concerns of Federal Reserve Chairman Alan Greenspan about a gas supply shortfall. “This is a man that doesn’t use words like ‘crisis looming’ liberally,” noted Sen. Mary Landrieu (D-LA).

This is “not just a benign study,” said Feinstein, noting that seismic surveys, sediment samplings and other exploration-type activities will have to be conducted to get an accurate inventory. These, she noted, would “negatively impact” sensitive coastal and marine areas.

“You can dress up a pig, put lipstick on a pig,” but in the end “it’s still a pig,” argued Sen. Barbara Boxer (D-CA), who insisted that an inventory would amount to “another environmental rollback” for certain coastal states. Californians are dead set against drilling because the memory of the major oil spill off the coast of Santa Barbara in 1969 is still fresh in their minds, she said.

If, as Republicans contend, the inventory will not be a prelude to drilling, then “why spend the taxpayers’ dollars to find out” the reserve potential of these areas, asked Sen. Maria Cantwell (D-WA).

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