Nelson Endorses Lease Sale 181 Bill; Frist Schedules Monday Vote

Sen. Bill Nelson (D-FL), a long-time opponent of drilling near Florida, announced his support Thursday for a bill that would open the eastern Gulf of Mexico to oil and natural gas leasing after receiving assurances from Republican and Democratic leaders that they would not endorse the measure if the protections for the Sunshine State are significantly altered in conference.

In declaring his support for S. 3711, Nelson said he received an e-mail from Senate Majority Leader Bill Frist (R-TN) in which he vowed "not [to] bring a bill back [from conference] before the Senate that does not provide adequate protections for the state of Florida."

On Wednesday, "I spoke personally to Sen. Frist on the telephone and [he] told me that he would do everything within his ability to keep it to the Senate version when the bill returns to the Senate," Nelson said on the floor Thursday. "That's a pretty good assurance for this senator to protect the interests of Florida."

In addition, he said he received a similar guarantee in a letter from Democratic Leader Harry Reid of Nevada. "It is my expectation that the House of Representatives will accept S. 3711 as passed by the Senate without amending it and without modifying it in a conference committee. If the House does not accept the Senate bill as passed, I will join other senators and Sen. Nelson [to] produce the votes to sustain a filibuster to prevent the passage of the bill when it [will] return to the Senate," Reid wrote Nelson.

While the Senate bill is limited to opening the eastern Gulf to leasing, the House offshore bill (HR 4761) that was passed in June would allow leasing off the East and Pacific Coasts. Unlike the Senate bill, the House measure does not offer special protections to Florida.

Frist rejected Democratic motions to offer amendments to S. 3711, saying he wanted the offshore leasing bill to be a "carefully crafted, focused [and] very discrete bill." The bill would make 8.3 million acres in the Lease Sale 181 area in the eastern Gulf and in a tract south of Lease Sale 181 available to oil and natural gas producers, providing protections from drilling for Florida until 2022 and give four Gulf Coast states a bigger share of the federal royalties from drilling in the Outer Continental Shelf (OCS) to restore their receding wetlands and other coastal areas. The new leasing is expected to result in the production of 1.26 billion barrels of oil and 6 Tcf of natural gas.

Frist also filed a motion for cloture to cut off debate on S. 3711 on Monday, with a vote tentatively scheduled to take place at 5:30 p.m.

The White House issued a statement Wednesday supporting the bill's goal of opening Lease Sale 181 and the tract south of Lease 181 to leasing, but it tempered its support with concern over provisions in the bill that would allocate a percentage (37.5%) of federal royalties on production in the Lease 181 region to the four Gulf Coast states over the next decade, and would expand that allocation to include a share of royalties on production from new leasing in existing fields in the Gulf starting in 2017. The bill would cap Gulf OCS royalties to the coastal states at $500 million each fiscal year between 2016 through 2055, "net of receipts" from leasing in the Lease 181 region.

"The administration is concerned about the rate of revenue sharing in the bill for new leases in presently accessible areas, and that S. 3711 creates an expectation for an amount of shared revenues that exceeds the cap. For these reasons, among others, it is important that spending be held to the cap in this bill" to protect the U.S. Treasury, the White House statement said.

Copyright 2006 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

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