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Wed, Aug 02, 2006 - Page 10 News List

US Senate clears way for drilling in Gulf of Mexico

ENERGY BILL The Senate is set to pass legislation that will allow drilling for oil and natural gas along the Gulf Coast in waters that have been protected

AP , WASHINGTON

The US Senate has cleared the way for legislation that would open 3.4 million protected hectares in the Gulf of Mexico to oil and gas drilling.

Senators voted 72-23 to limit debate, assuring a final vote on the bill this week before senators leave for the summer recess. The bill's supporters said they have the majority needed to push it through.

A battle loomed with the House of Representatives, which has approved a bill that would allow drilling far beyond the limited area in the central Gulf of Mexico. Negotiations to reconcile the two measures will not begin before next month.

The House would lift a quarter-century moratorium that has kept 85 percent of the nation's coastal waters from New England to Alaska off-limits to energy companies. Senate Democrats and Republican moderates have vowed to block legislation that would jeopardize the drilling ban along the Pacific and Atlantic coasts.

Gulf limits

Senate leaders have promised lawmakers from Florida and other coastal states that they would insist a final bill not go beyond the Gulf waters. The Senate legislation also would provide tens of millions of dollars to four Gulf states for coastal restoration.

Republican Senator Pete Domenici, a principal sponsor, bemoaned "the crazy idea that these resources should be locked up" when the country needs more domestic oil and gas supplies.

They've "been locked up for no good reason other than emotion," he argued.

Domenici said while he favors lifting the moratorium in some waters outside the Gulf, he would "do everything in my power" to structure a final compromise with the House that could pass the Senate and avoid a potentially fatal parliamentary delay of the bill in the Senate. Democrats have said if the Senate measure is changed substantially they would block it by such a filibuster if necessary.

The Senate bill would require the Interior Department to issue drilling leases within a year in 810,000 hectares known as Lease Area 181 and in another 2.6 million hectares just south of it in the east-central Gulf of Mexico. Both areas have been off-limits to energy companies and are believed to have 1.2 billion barrels of oil and nearly 170 billion cubic meters of natural gas, enough to heat 6 million homes for 15 years.

Florida support

To gain the support of Florida's senators, no drilling would be allowed within 200km of Florida's coast, and in some areas the leases would be more than 370km from the state's beaches.

Broad opposition to the bill began to melt away last week when Democratic Senator Bill Nelson of Florida, who had threatened to filibuster any offshore drilling legislation, announced his support after being assured by Senate leaders they would not accept the House bill.

The legislation has been a top priority of Democratic Senator Mary Landrieu, who pushed for a change in how the government shares royalties from oil and gas development with the four Gulf states that have drilling rigs off their shores, including Laundries' state, Louisiana.

Under the bill, Louisiana, Mississippi, Alabama and Texas would get 37.5 percent of the revenue, compared to the less than 2 percent they now receive. In 10 years, the four states were expected to get an additional US$1.2 billion a year, about half going to Louisiana.

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