US congressional analysts put OCS bill's cost at $11 billion

Washington (Platts)--27Jun2006

A US House bill that would lift existing bans on oil and gas drilling in
the Outer Continental Shelf and share production royalties with states would
cost the federal Treasury $11 billion over 10 years, the Congressional Budget
Office said Tuesday. The House is expected to debate the legislation later
this week.

The bill, which was approved by the House Resources Committee June 21,
would permit drilling on more of the OCS and give coastal states as much as
75% of royalties from oil and gas development in federal waters off their
borders.

The nonpartisan CBO said in a report that the revenue-sharing provisions
would cost the government $20.7 billion, an amount that would be partially
offset by new fees on some deepwater leases and royalties the Treasury would
gain from expanded OCS drilling.

The bill would lift federal bans on OCS drilling for tracts 100 miles
from shore. The moratoria apply to the US Atlantic and Pacific coasts and most
of Alaska.

States would have the option of determining whether to allow leasing
within 100 miles of their coasts. Under current law, OCS royalties for the
federal government are projected at $102 billion between fiscal 2007 and
fiscal 2016.

---Mike Schmidt, mike_schmidt@platts.com


 

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