Shelf

Bush administration officials expressed support last Wednesday for expanded oil and natural gas leasing in the federal Outer Continental Shelf (OCS), as well as the sharing of royalties on production from “new leases in new areas” with coastal states.

Bush administration officials expressed support Wednesday for expanded oil and natural gas leasing in the federal Outer Continental Shelf (OCS), as well as the sharing of royalties from “new leases in new areas” with coastal states.

A House Resources Committee bill (HR 4761) that would open up more areas of the Outer Continental Shelf (OCS) to oil and natural gas drilling and would give states a greater share of the royalties from offshore production would cost the federal government $11 billion over the next decade if enacted, the Congressional Budget Office (CBO) said in a new report.

The House Resources Committee on Monday introduced a compromise bill that would open up heretofore closed portions of the Outer Continental Shelf (OCS) to oil and gas drilling and would give states a greater share of the royalty pie from offshore production.

The Bush administration favors opening up additional oil and natural gas resources for development on the Outer Continental Shelf (OCS) and would support an “appropriately structured revenue-sharing” plan with energy-friendly coastal states, an Interior Department told a House committee Wednesday.

Senate legislation (S. 2314) that seeks to scale back royalty relief for oil and natural gas producers in the Outer Continental Shelf (OCS) would trigger an increase in the amount oil and gas royalties paid to the federal government, but it also would result in a drop-off in bonus bid revenues flowing into the U.S. Treasury, according to the Congressional Budget Office (CBO). Consequently, net receipts to the federal government from offshore leasing might not rise in the long run and even could fall over the next five years, it said.

Rep. Richard Pombo (R-CA), chairman of the House Resources Committee, is working to reattach expanded Outer Continental Shelf (OCS) drilling to the pending budget reconciliation package, according to Capitol Hill aides.

Less than a week after House leaders scrapped expanded Outer Continental Shelf (OCS) development as part of the deficit-reduction package, two members of the House Resources Committee are expected to introduce stand-alone legislation by Tuesday that would eliminate the moratorium with respect to drilling for natural gas on the federal OCS.

New Orleans-based McMoRan Exploration Co. said this week that it has gauged more Gulf of Mexico deep shelf natural gas condensate discoveries and plans to soon ramp up production.