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House Panel Votes to Force More Oil Leases in U.S. Waters

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WASHINGTON (Dow Jones Newswires), Apr. 14, 2011

A bill requiring the U.S. to open areas off the Virginia coast and in the Gulf of Mexico to oil and gas exploration cleared a key hurdle in the U.S. House Wednesday. The House Natural Resources Committee voted to approve the leasing measure, paving the way for a vote by the full House next month. Earlier Wednesday, the committee also voted to establish a 60-day maximum for the Interior Department to approve or deny offshore drilling permits. If Interior took longer, the permit would be deemed approved.

The bills are part of an effort by House Republicans to support domestic oil and gas production, which they have stepped up in recent months in the face of rising gasoline prices. Democrats have pushed back, saying that Congress should focus on providing incentives for non-traditional energy sources and reducing energy consumption.

All but two Democrats voted against the bills on offshore leasing. The bills' prospects are less certain in the Senate, where Democrats hold a majority.

One proposal approved Wednesday would override a decision last year from the Obama administration not to open the U.S. Atlantic Coast to offshore drilling. It directs the Interior Department to lease areas off the Virginia coast within one year after the bill becomes law.

The bills would also direct Interior to move forward with three new leases in the Gulf, declaring previous environmental reviews of those areas to be sufficient. The administration has delayed its Gulf leasing plans and is conducting new environmental reviews following the Deepwater Horizon disaster nearly one year ago.

"What we're attempting to do is provide some certainty to those who would give us American-made energy," said Rep. Doc Hastings (R., Wash.), chairman of the Natural Resources Committee, and a main sponsor of the bills.

During debate on the proposals, Rep. Rush Holt (D., N.J.) argued that Interior shouldn't move forward with new leases without a new environmental analysis based on lessons learned from the Deepwater Horizon. He said previous reviews had been "very clearly and woefully flawed." Rep. Doug Lamborn (R., Colo.) countered that further environmental reviews would take place as companies apply for permission to explore and drill new wells. Hastings noted that the legislation approved Wednesday requires Interior to conduct a safety review for each drilling permit. Still, Democrats criticized their counterparts for not taking up a bill that would implement recommendations of a presidential commission that studied last year's oil spill. Congress hasn't yet sent the president a bill in response to the disaster, which began with the explosion on a rig leased by BP on April 20.

A proposal to add safety regulations to the House bills, offered Wednesday by Rep. Ed Markey (D., Mass.), was voted down by the Republican majority. "This amendment would micromanage and dictate thorough safety standards" that should be established by the Interior Department, Lamborn said. The majority also rejected a host of proposals from lawmakers in coastal states designed to restrict exploration in the Pacific and Atlantic Oceans.

The legislation would also extend by one year leases impacted by the Obama administration's moratorium on drilling after the Deepwater Horizon disaster. The provision would apply to wells that weren't producing before April 30. It was added to the bill Wednesday in an amendment offered by Rep. Bill Flores (R., Texas).

Lawmakers briefly considered inserting a provision to require oil and natural gas facilities to use only equipment and materials produced in the U.S, but Rep. John Garamendi (D., Calif.) withdrew the amendment after other lawmakers said it was too inflexible. Some Republicans seemed open to the concept, however, and Garamendi said he might offer a different version at a later date.

Also Wednesday, the committee voted to require Interior to open up more resource-rich areas to exploration as part of its next five-year leasing plan. The full Republican-controlled House is expected vote on the bills next month.

Copyright (c) 2011 Dow Jones & Company, Inc.


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