House panel's bill would open ANWR; allow offshore ban opt-out

Washington (Platts)--24Oct2005

Rep. Richard Pombo (Republican-California), chairman of the House
Resources Committee, introduced the committee's budget reconciliation package
Monday, including provisions that would open the Arctic National Wildlife
Refuge to oil and gas leasing.

     The legislation, which will be considered by the committee on Wednesday,
also includes language that would allow states to opt out of the moratorium on
offshore leasing and allow production off their coasts.

    The Senate Energy Committee authorized ANWR leasing in its budget
submission last week. The Senate Budget Committee is scheduled to consider the
entire budget reconciliation package on Wednesday. 

     The Pombo bill directs the Interior Department to conduct the first ANWR
lease sale within 22 months of enactment and to conduct additional sales "as
sufficient interest in development exists." The department would have to offer
tracts thought to have the greatest hydrocarbon potential and no less than
200,000 acres. 

    A committee statement said ANWR lease sales would raise $2.4-bil in
federal revenues and produce 10.4-bil bbl in oil. 

     The offshore leasing language would allow states to extend the
presidential moratorium on offshore production past 2012, when it is slated to
expire. It also terminates existing law that prohibits the spending of
appropriated funds to conduct oil and gas lease sales and preleasing activity.
Congress has imposed a series of one-year moratoria since the early 1980s by
prohibiting the Interior Department from spending money to conduct sales.

     The legislation also establishes a mechanism allowing the Interior
Department to buy-back any offshore or onshore lease. It also provides that
the holder of a lease located within 100 miles of the Florida or California
coastlines would have the option of exchanging the lease for a new, unleased
tract at least part of which is between 100 and 125 miles from the coastline
and completely beyond 100 miles.

     The bill would allow coastal states to receive up to 40% of offshore
revenues. Currently, coastal states receive less than 1% of revenues from
federal offshore federal lands, according to the committee.

     It would also repeal a provision in comprehensive energy legislation
that requires an inventory of all offshore oil and gas resources.

--Gerry Karey, gerry_karey@platts.com

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