Senate approves more offshore drilling

Opposition melted
One part of the area, known as Lease Area 181, had been scheduled for lease sales by the Interior Department in the 1990s, but was placed off-limits by the Bush administration in 2001 at the request of Florida Gov. Jeb Bush. The remaining 6.3 million acres south of Lease Area 181 has been under a congressional drilling moratorium for years.

Broad opposition to the Senate bill began to melt away last week when Sen. Bill Nelson, D-Fla., who had threatened to filibuster any offshore drilling legislation, said he would go along given the promise that the Senate would not accept the House measure.

The issue has attracted intense lobbying from environmentalists arguing that drilling in areas now off-limits would threaten coastal beaches and marine life if a spill should occur.

Businesses — from chemical companies and manufacturers to utilities and farmers — have pushed lawmakers hard to open more waters to drilling, arguing that will provide new supplies of natural gas and perhaps lower prices.

The bill calls for the Department of the Interior to open bids for developing Lease Area 181 within a year and follow with lease sales in the rest of the area — which is farther off shore in waters more than 10,000 feet deep — as soon as practical.

Money to restore coastline
Energy companies for years have coveted Lease Area 181 because the gas and oil it holds is close to existing pipelines and other infrastructure. It lies about 100 miles off the Louisiana coast.

Under the bill, Louisiana, Texas, Alabama and Mississippi would get 37.5 percent of the royalty revenue the federal government collects from the oil and gas that is pumped off their shores. They now get less than 2 percent.

That is expected to be as much as $1.2 billion a year within 10 years with Louisiana likely to get about half of that.

“There’s no policy justification for diverting these revenues,” Sen. Jeff Bingaman, D-N.M., said. He said while the revenue sharing will increase gradually, between 2016 and 2055 the states could get as much as $30 billion. After that their share could be $12.5 billion a year.

Sen. Mary Landrieu, D-La., said these states for decades have been shortchanged and that it’s only fair that their share be increased in a new “partnership” with the federal government to expand energy development. “We will use the money to restore a great coastline ... restore the great wetlands” off the Louisiana coast and improve storm protection, she said.

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