Senate Bill Puts Offshore Drilling in State Hands
USA: April 7, 2005


WASHINGTON - US states could allow drilling for natural gas in restricted offshore waters under legislation proposed Wednesday by Republican Sen. Lamar Alexander.

 


Most US coastal states -- notably Florida and California -- are subject to a federal moratorium that forbids offshore oil and natural gas drilling.

But with US oil and natural gas prices at near-record levels, energy companies are pushing Congress to open sensitive areas offshore and in the Rocky Mountains to the drillbit.

Alexander's bill would allow state governors to lift federal moratorium on offshore tracts over 20 miles from shore and collect a royalty payment on the natural gas that energy companies would produce.

"We have plenty of natural gas -- we just can't get to it," said Alexander, who represents Tennessee in the Senate.

Virginia's legislature recently passed a law that would have allowed offshore drilling, but Gov. Mark Warner vetoed it.

Former President George H. W. Bush in 1990 placed a 10-year drilling moratorium on most offshore US acreage -- including California, Oregon, Washington, most of the East Coast and the eastern Gulf of Mexico. Former President Bill Clinton in 1998 extended the moratorium until 2012.

States like Texas, Louisiana and Alabama that border the oil-rich Gulf of Mexico are the exception, and state waters have been drilled for decades.

Alexander's bill also wants to open contested Gulf of Mexico acreage located about 100 miles off Florida's coast, parts of which lie in Alabama waters. The government estimates the area's reserves at 1.25 trillion cubic feet of natural gas, or about a 15-year supply for over a million US families.

That area, known as Lease 181, is "probably the quickest and easiest place we where we could get a lot more gas," Alexander said.

The bill would require the Interior Department to draw a line that separates Alabama's share of the lease from Florida's share.

In Alabama, where natural gas drilling is already allowed, tracts would have to be leased by the end of 2007. Florida would also have the option of leasing its tracts on Lease 181.

"Floridians may decide they want gas wells they can't see rather than a state income tax," Alexander said.

 


Story by Chris Baltimore

 


REUTERS NEWS SERVICE