 By ZACHARY COILE San Francisco Chronicle June 19, 2006
Critics say the measure is an attempt to bribe states to allow oil and gas production in areas that have been off limits. The plan also would force governors in states such as California and Florida, which oppose offshore drilling, to petition the federal government to continue the moratorium on drilling off their coasts.
The debate over royalties is the latest flash point in what is emerging as one of the biggest environmental battles in Congress this year. Drilling proponents point to the need for greater offshore production to address rising energy costs; opponents cite the risks of oil spills to the environment and to coastal communities that depend on tourism. The new legislation, written by Louisiana lawmakers, would be a boon to states such as Texas, Louisiana, Mississippi and Alabama, which already have drilling rigs off their shores. States would receive 75 percent of all royalties for drilling within 12 miles of their coastline and half of all revenues for projects up to 100 miles offshore. Under the new formula, Louisiana alone would receive an extra $50 billion over 30 years. "What we're trying to do is be equitable to the states," Bobby Jindal, R-La., chief sponsor of the measure, said at a hearing on the bill Wednesday in the House Resources Committee. The legislation has run into opposition from an unexpected source: the Bush administration. White House officials have come to rely on the billions of dollars in oil and gas royalties to pay for everything from the Iraq war to homeland security, and they are afraid of worsening the federal budget deficit if they agree to share more revenue with states. A top Interior Department official told lawmakers Wednesday that the administration would support a plan that allows states to "opt out" of the federal moratorium on drilling but did not back a revenue-sharing plan it views as too generous. "We have serious concerns about this bill because of its excessive short- and long-term costs," said R.M. "Johnnie" Burton, director of the Minerals Management Service, which runs the federal oil and gas leasing program. But she said the administration was willing to consider more limited revenue-sharing. The administration's position angered proponents of the new legislation, including the House Resources Committee chairman, Rep. Richard Pombo, R-Calif. Pombo, who authored an offshore drilling bill that failed last year, lashed out at the "bean counters" at the Office of Management and Budget for failing to recognize that giving states some of the revenue would lead to more drilling, creating a bigger pool of royalties to be split with the federal government. "When it comes to onshore leases, we share revenues with the states in which those leases are located," Pombo said. "But there seems to be an objection to sharing revenues when it comes to offshore." Driven by concerns by the public and the business community over rising energy prices, House Republicans are trying to quickly pass legislation to increase oil and gas drilling in federal waters. The new bill could be approved by the Resources Committee as soon as next week and voted on by the House later this month. But many Democrats and some Republicans, especially from coastal states, oppose the attempt to change the quarter-century-old policy that has prevented most drilling off the Atlantic and Pacific coasts and the eastern Gulf of Mexico. Last month, a group of Florida Republicans joined with most Democrats to block a provision in an Interior Department spending bill that would have ended the moratorium, but only for natural gas drilling. The measure was defeated, 217-203. But drilling opponents fear the new bill may have a better chance of prevailing because it would allow coastal states like Florida some protection against drilling. Governors, with the concurrence of state legislatures, could petition the government to block drilling within 125 miles of their shores. At Wednesday's hearing, Florida's secretary for environmental protection, Colleen Castille, said Gov. Jeb Bush supported the plan. "Such a plan by Congress would give the people of Florida the ability to maintain in perpetuity a no-drilling buffer zone that would forever protect our resources," she said. Some Florida lawmakers believe
the 125-mile buffer zone does not go far enough. Federal waters
extend 200 miles offshore.
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