A compromise bipartisan bill to allow drilling for natural gas in areas farther than 50 miles offshore appears headed for passage in the House, although there is no companion measure in the Senate.
The Deep Ocean Energy Resources Bill, which is a compromise effort that consolidates drilling-related bills in the House, was approved June 21 by the House Committee on Resources. The Washington-based Society of the Plastics Industry Inc. said passage appears likely in the House, where a vote is set for June 27. The bill is expected to carry a strong number of votes because of the involvement of legislators from Florida, where there traditionally has been opposition to drilling because of tourism issues. A key supporter is Rep. Adam Putnam, R-Fla.
While SPI President and Chief Executive Officer William Carteaux called the bill ``a major step forward'' in the effort to gain access to natural gas resources, a number of obstacles remain. Rising natural gas prices have been a double whammy for the plastics industry because natural gas is used to run plants and as a feedstock for resins.
Because there is no companion bill, that means hope for increased access to offshore water since drilling depends first on whether the Senate passes SB2253, and then on what prevails in a conference committee. SB2253, sponsored by Sen. Pete Domenici, R.-N.M., would open up drilling in Lease Area 181 of the Outer Continental Shelf. The legislation passed the Senate Energy & Natural Resources Committee by a 15-6 vote in April, but is not likely to be brought to the floor for a vote until after the November elections.
The DOER bill would prohibit oil and gas leasing within 50 miles of coastline area, but would allow states to opt out of that federal ban with the approval of their legislatures. However, drilling natural gas would be allowed automatically in areas between 50 and 100 miles unless states ban such drilling within one year of the bill's passage. No natural gas drilling would be allowed with 25 miles of the border of a state that does not support leasing.
In an effort to persuade states to allow leasing, the bill would create a revenue-sharing arrangement allowing states to collect 50-75 percent of revenues from leases, which typically range in the billions of dollars. All revenues from oil and gas leasing now go to the federal government.
The bill also would create several funds to assess and take into the account the impact on the environment and the wildlife.
``We need access to natural gas,'' said Chris Brown, senior director of federal government affairs for SPI. He said that any legislation from a potential conference committee that allows access to offshore waters for natural gas drilling would be a positive, but that ``we would want to have a bill that resembles what comes out of the House.''