Virginia Senators Seek to Expand Offshore Energy Leasing

Industry Execs See Higher Costs, Improved Safety with New Regulations

Senators Mark Warner (D-Va.) and Tim Kaine (D-Va.) introduced legislation Wednesday that would revise the Obama administration’s proposed 2012-2017 offshore oil and gas leasing plan to include acreage offshore Virginia.

The Virginia Outer Continental Shelf Energy Production Act of 2013 would bolster the state's energy security, create jobs and direct revenue to Virginia that will support important priorities across the state, Kaine said in a May 22 statement.

"Virginia is well positioned to be a national leader in offshore energy exploration," Kaine added. "A comprehensive energy strategy – including oil, gas, wind, solar, tidal and other areas – can transition us to a clean energy future while bridging that transition with secure U.S. fuels we don't have to import."

Offshore Virginia lease sales originally were set to begin in 2011, but were delayed until 2017 after the Deepwater Horizon oil spill in the Gulf of Mexico in 2010. Warner had introduced similar legislation in 2011 and 2012 to open up leasing offshore Virginia.

"Our legislation includes appropriate environmental protections and an equitable formula for sharing revenues between the state and federal governments," Warner noted in a May 22 statement.

The bill would implement revenue sharing, using a similar formula to what Gulf Coast states current collect. Under the bill, Virginia would receive revenues of 37.5 percent. The revenue sharing language is technology neutral, covering all forms of energy production, including offshore wind energy.

Both Warner and Kaine have strongly supported wind energy development offshore Virginia. The Bureau of Ocean Energy Management is moving forward with a plan to offer a wind energy research lease to the Commonwealth of Virginia's Department of Mines Minerals and Energy.

The legislation is similar to House legislation recently proposed by U.S. Rep. Scott Rigell (R-Va.). Introduced April 29, the Virginia Jobs and Energy Act (H.R. 1782) would open the Outer Continental Shelf offshore Virginia for energy development, and could create as many as 18,000 local jobs in Virginia "while moving America away from its dangerous reliance on foreign oil," said Rigell in a statement.

"This translates into funds that could be used to improve local schools, fund transportation projects, and restore the Chesapeake Bay while diversifying the local economy," Rigell noted.

H.R. 1782 would require Lease Sale 220 to be conducted within one year, and also requires at least one additional lease sale be included within the Virginia Lease Sale Planning Area in each subsequent five-year leasing plan. The bill also would speed up the process for offshore renewable energy development such as wind.

The legislation would also codify the current agreement between the U.S. Department of Defense and the Department of the Interior, which requires mutually acceptable solutions to any issues raised by conflicting requirements. It also requires the Secretary of Defense and Secretary of the Interior to periodically review and revise the agreement to account for new offshore energy production technologies, particularly renewable.

In February, the governors of Virginia and North and South Carolina called on then Secretary of the Interior nominee Sally Jewell to revise the Obama administration's current offshore leasing policy and open waters offshore their states for oil and gas exploration.


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