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Senate panel orders study of offshore drilling
Scripps Howard News Service


May 27, 2005

Washington - A Senate committee took a step Thursday toward lifting the federal moratorium on offshore energy drilling by directing the Interior Department to study how much natural gas is contained in the outer continental shelf.

An amendment sponsored Sen. Mary Landrieu, D-La., authorizing the study was added to a bill overhauling federal energy policy _ one of President Bush's top legislative priorities _ shortly before the Energy and Natural Resources Committee approved the bill.

"The people of America have a right to know what they own," said Landrieu. "Then ... they can determine what they want to do."

Supporters of lifting the moratorium have tried and failed several times in recent years to obtain a scientific inventory of offshore oil and gas reserves. Drilling opponents have blocked an inventory, fearing that confirmation of large and valuable reserves would make it more difficult to maintain the moratorium.

"An inventory, in all fairness, is a step onto a slippery slope," said Sen. Jon Corzine, D-N.J., a drilling opponent. He noted that New Jersey's 127 miles of coast are the foundation of its $35 billion-a-year tourism industry.

"I think it's important that people understand how potentially destructive this could be to a state of 8.5 million people and I suspect to other states as well," Corzine said.

Landrieu withdrew a second amendment that would have directed the Interior secretary to come up with a formula for sharing federal offshore gas royalties with coastal states that decide to permit drilling.

Energy Committee Chairman Pete Domenici, R-N.M., said that while he supported Landrieu's goal, he feared the amendment was so controversial that it might kill the entire bill. Landrieu and a bipartisan group of senators said they intend to press the issue of allowing states to lift the drilling moratorium off their shores in exchange for a share of federal royalties when the bill comes to the Senate floor.

A coalition of industries hit hard by rising natural gas prices _ including agriculture, fertilizer, manufacturing and plastics _ has been trying to entice some cash-strapped coastal states to drop their opposition to drilling by holding out the possibility of royalties.

The Virginia legislature recently passed a resolution endorsing natural gas drilling off the state's coast in exchange for royalties. Gov. Mark Warner vetoed the resolution, but left open the possibility that he might support the concept in the future. The resolution's supporters estimated royalties could generate as much as $2 billion a year for the state.

"If in the end we want states to opt out of this moratorium, there have to be incentives," said Sen. George Allen, R-Va.

States receive 50 percent of the royalties from energy development that takes place on federal lands within their borders. But coastal states don't get any royalties from energy produced more than nine miles offshore.

The moratorium on offshore drilling was first imposed in 1981 and has been extended twice. It is due to expire in 2012.


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