US Senate Energy Panel Sets Hearing on Offshore Resources

WASHINGTON Jan 19, 2007 (Dow Jones Commodities News)

The U.S. Senate Energy and Natural Resources Committee will hold a hearing Thursday on the resources available on the offshore continental shelf, or OCS, the committee said Friday.

The hearing was requested by the ranking Republican on the committee Senator Pete Domenici, R-N.M., who has supported broader exploration access in the Gulf.

In December, Congress passed a drilling bill that opened up 8.3 million acres in the Gulf of Mexico, estimated to hold around 1.26 billion barrels of oil and 5.8 trillion cubic feet of natural gas. Although oil companies praised passage of the bill after a long fight over the amount of acreage to be opened and subsequent fears that no new acreage would become available, many congressmen, senators and oil companies were anxious for more areas to open.

Marnie Funk, minority spokeswoman for the committee, said the hearing would examine what the next steps would be to open up further acreage.

"There are more states that are interested in oil and gas development, and this would be an important step for that," she said.

Energy and Natural Resources Committee Chairman Jeff Bingaman, D-N.M., has also been supportive of opening up more acreage.

The witness list may point to an additional agenda. Besides an expected line-up from the government and industry with Interior Department Assistant Secretary Stephen Allred, Chevron Corp (CVX) Chief Executive David O'Reilly and Devon Energy Corp (DVN) President Larry Nichols, there are also three witnesses that will be able to testify on the environmental impact of offshore drilling.

New Jersey Department of Environmental Protection Commissioner Lisa Jackson, Sierra Club Director of Lands Protection Athen Manuel and a yet-to-be identified witness from the State of Louisiana have also been called.

In November, the U.S. Minerals Management Service said it was preparing for an expanded Gulf of Mexico oil and gas lease sale in August or September next year.

The MMS had to cancel Lease Sale 201 - representing a huge portion of the acreage off the coast of Louisiana and Mississippi - originally scheduled for March 2007 following a settlement with the State of Louisiana in October over a battle on inadequacy of its environmental impact assessment.

The MMS agreed in the settlement with Louisiana to conduct an assessment of the environmental impact of offshore drilling activities on its fragile coastal wetlands.

Copyright (c) 2007 Dow Jones & Company, Inc.

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