Plan for Coastal Drilling Emerges

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Pointing to Katrina’s hit to fuel supplies, some in Congress seek to diversify by loosening a ban covering areas such as offshore California.

Source of this article – Los Angeles Times, October 3, 2005.

By Richard Simon and Kenneth R. Weiss
Times Staff Writers

WASHINGTON — Citing hurricane damage to the oil and gas industry in the Gulf of Mexico, key lawmakers are trying to relax a decades-old federal ban on new drilling off California and the Atlantic Seaboard and to encourage energy prospecting in the Rocky Mountains.

Congressional proposals also aim to waive some air pollution rules to encourage expansion of oil refineries and to authorize oil drilling beneath Alaska’s Arctic National Wildlife Refuge.

“Mother Nature proved just how vulnerable America is to supply disruption,” said House Resources Committee Chairman Richard W. Pombo (R-Tracy). “We must do more to increase and to diversify domestic supplies.”

The legislation, likely to be voted on soon in the House, comes as oil- and natural-gas-dependent manufacturers have urged Congress to reopen the “85% of all federally controlled coastal waters [that] are currently off-limits to energy production.”

“The nation is paying the price for concentrating so much of its energy infrastructure in a small geographic area,” wrote the American Gas Assn. and more than 100 other petrochemical companies and manufacturers. “As we go about the business of recovering from Hurricane Katrina … Congress has an opportunity to reduce the nation’s vulnerability to sudden energy shocks by expanding our sources and supplies of energy — especially in our coastal waters.”

Yet opponents in Congress point to the 191,000 barrels of oil that have gushed into the gulf from ruptured pipelines and hurricane-battered oil facilities as a reminder of the difficult-to-contain disasters that can accompany offshore production. Spills brought about by Hurricane Katrina amount to about 80% of the oil that despoiled Alaskan waters when the Exxon Valdez tanker ran aground in 1989.

Some lawmakers, including Sen. Mel Martinez (R-Fla.), worry that hasty federal policy changes could expose fragile coastal environments, fisheries and beach-dependent tourism to disaster risks. “It keeps getting more threatening all the time,” Martinez said.

Others are incensed at what they consider raw opportunism to exploit high gas prices and hurricane damage.

“This just looks like the oil and gas industry are shamelessly using the tragedy of Katrina and Rita to try and push their special-interest agenda through Congress,” said Rep. Lois Capps, a Santa Barbara Democrat who represents a district that experienced a devastating oil platform blowout in 1969. “We need to address our energy needs, but we don’t need to jeopardize our environment and economy to do it, and we shouldn’t use a national tragedy as cover for bad policy.”

States control oil and gas drilling within three miles of their coastlines. Federal waters begin where states’ end and extend 200 miles off the coast. The federal Minerals Management Service regulates drilling there.

For more than two decades, bipartisan lawmaker coalitions have resisted challenges to Congress’ ban on new offshore oil and gas leasing on the West and East Coasts and much of Florida.

Congress first passed the moratorium in 1981 to cover waters off Northern California and Massachusetts in response to then-Interior Secretary James G. Watt’s plan to open the entire outer continental shelf to new oil and gas development. The ban was expanded in 1985 to include most of the rest of U.S. coastal waters and has been renewed every year since.

Last week, the House Resources Committee approved Pombo’s legislation to let states “opt out” of the moratorium in exchange for a larger federal share of the royalties. Supporters say that would be especially helpful to Louisiana, which already allows offshore drilling and needs billions of dollars for post-hurricane reconstruction.

Sen. George Allen (R-Va.) is promoting similar legislation. His state has expressed an interest in opening its coastal waters to drilling.

The California Ocean Protection Council, speaking on behalf of Gov. Arnold Schwarzenegger, requested in a letter to Pombo that “future congressional legislation exclude any language that threatens this moratorium that has been protecting our shores more than two decades.”

Florida Gov. Jeb Bush seems to favor much of Pombo’s bill, especially a portion that would allow Florida to adopt a permanent no-drilling buffer zone within 125 miles of the state’s coastline.

Florida’s members of Congress, many of them Republican, have been a critical component of the bipartisan annual renewal of the congressional moratorium on new offshore drilling, joining a number of Democratic lawmakers from California and New England.

Rep. Tom Feeney (R-Fla.) said he and his colleagues were examining Pombo’s opt-out legislation to determine “whether we think it’s a better deal than Florida has now.”

Rep. Jeff Miller (R-Fla.) said he believed the measure could strengthen the state’s hand in protecting its coastline: “I support Florida having the opportunity to protect its own waters, thereby taking away the pressure from other states from controlling what takes place in our waters.”

Drilling foes worry that lawmakers who favor energy development have devised a divide-and-conquer strategy to unravel the moratorium coalition.

“If, all of a sudden, the Florida delegation drops out of the equation, it makes the rest of the country much more vulnerable,” said Lisa Speer, senior policy analyst for the Natural Resources Defense Council. “The coastal states that don’t want to see [outer continental shelf] development really need to hang together, or they’re going to hang separately.”

The House Resources Committee’s top Democrat, Nick J. Rahall II of West Virginia, agreed that Pombo’s bill endangered the moratorium. “States that opt not to drill but are adjacent to those that choose to drill will be vulnerable to the consequences of their neighbors’ actions,” he said.

Pombo’s 168-page bill has scores of proposals to encourage energy development — and remove obstacles — both on- and offshore.

It would allow new exemptions from environmental rules, shorten public comment periods and limit lawsuits over leasing decisions made by the Bureau of Land Management.

The bill proposes to kick-start the dormant shale oil industry by greatly discounting the royalty rate that companies would pay in the first 15 years of production. Shale oil is found in deposits in western Colorado.

It would allow a waiver of the National Historic Preservation Act on private lands, so that oil and gas development could proceed without assessing potential effects on Native American burial or archeological sites.

House Energy and Commerce Committee Chairman Joe Barton (R-Texas) has advanced his own package of incentives to build new refineries, including certain waivers to the Clean Air Act.

A surprise amendment to Pombo’s legislation, by Rep. John E. Peterson (R-Pa.), would lift the offshore moratorium nationwide for companies seeking to drill for natural gas.

Pombo has expressed his concern about the amendment, which seems to conflict with his strategy.

Supporters of energy development have been encouraged by a recent survey by the Pew Research Center for the People & the Press, which found that 57% of respondents view it as more important to develop new energy sources than to protect the environment.

The industry scored a victory this year with a requirement in the energy bill signed by President Bush for an inventory of offshore oil and natural gas resources.

The array of new energy proposals in the House may face strong resistance in the Senate, according to energy industry lobbyists.

Times staff writer Julie Cart contributed to this report.