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House Plans Push to End Offshore Oil Drilling Ban

With states being enticed by billions of dollars in potential oil and gas royalties, the House planned another push Thursday to end a drilling ban enacted a quarter-century ago on most of the country's offshore waters.

The vote, expected to be close, comes six weeks after a measure that would have allowed natural gas development in all coastal waters fell a handful of votes short of being approved.

This time, the bill would keep the ban in place within 50 miles of shore and allow states to continue the federal drilling moratorium up to 100 miles off shore if they act to do so every five years.

The bill also would revamp the revenue-sharing agreement with the states, so that they potentially would reap billions of dollars in future oil and gas royalties if they accepted drilling. Four Gulf Coast states that already have oil rigs off shore also would reap billions of additional dollars.

The moratorium's critics argue that the country needs access to all the oil and natural gas that it can get and that these offshore areas represent a huge resource yet to be tapped.

But while the restricted waters represent 85 percent of the Outer Continental Shelf acreage including both coasts, they are believed to hold only about a fifth of the nation's offshore oil and natural gas.

Waters under the ban hold 19 billion of the 86 billion barrels of oil most likely to be beneath the Outer Continental Shelf, and 86 trillion of the 420 trillion cubic feet of natural gas, according to the Interior Department's Minerals Management Service.

Opponents to lifting the drilling ban argue the additional resources are not worth the risks to states' multibillion-dollar tourist and recreational industries and potential harm to environmentally sensitive areas in event of an oil spill.

In the Senate, Florida's two senators have vowed to filibuster any legislation that would end the moratorium, which since the 1980s has been in place in waters from New England to southern Alaska, except for the eastern and central Gulf of Mexico where the country's offshore oil and gas rigs are concentrated.

The governors of Connecticut, New Jersey and Delaware sent letters to House leaders this week saying the offshore drilling moratorium should be lifted only "as a last resort, not a first step toward achieving energy independence."

They said they feared if a nearby state were to allow drilling, their ocean beaches — and multibillion-dollar tourist and recreational economies — could be hit by an oil spill or affected by related onshore infrastructure.

The bill endangers "one of America's most precious natural resources, our pristine beaches," said Rep. Jim Davis, D-Fla., who wants no energy development within 150 miles of Florida's shore.

Rep. Richard Pombo, R-Calif., instrumental in crafting the bill as chairman of the House Resources Committee, argues that the additional oil and gas deposits can be extracted with the necessary environmental protection given today's drilling technology.

He argues that if a state — including his own — doesn't want to open its waters to oil and gas companies it can bar them by having its legislature and governor agree to continue the federal ban.

Pombo has sought to broaden the bill's appeal by revamping the way revenue from the oil and gas royalties would be shared with the states. It's a windfall for the four Gulf states — Texas, Louisiana, Mississippi and Alabama — that already have oil and gas rigs off their shores, and a potential for billions of dollars in new revenue for states that agree to offshore drilling.

The four states would stand to gain the most under the revenue sharing changes, according to an analysis by the nonpartisan Congressional Budget Office. It estimated that the bill would funnel $20.6 billion in oil and gas royalty revenues to states between 2006-2017. All but $1.7 billion of that money would go to the four Gulf states that now have drilling, CBO said.

Those numbers are expected to decline somewhat in the first 10 years under a new revenue-sharing formula expected to be offered by Pombo that extends the phase-in for the largest, 75 percent increases to beyond 10 years.

Still, the financial benefits to the states would be substantial. Louisiana's share over the first 10 years would go to about $8.6 billion. Louisiana received only $32 million of the $6 billion in federal royalty revenue from rigs off its shores last year.

Gulf Coast lawmakers say that's only fair and that most of the money would pay to repair coastal wetlands, tidal barriers and for flood protection.