Panel Votes to Open Parts of Eastern GOM to Drilling



WASHINGTON (Dow Jones Newswires), Jun. 9, 2009

A U.S. Senate panel on Tuesday voted to open up a large part of the eastern Gulf of Mexico to oil and natural gas drilling, responding to voter concern about high energy prices but setting up a fight with Florida lawmakers who have kept the area off limits.

By 13-10, the U.S. Senate Energy and Natural Resources Committee added to an energy bill a measure that would allow oil and gas development starting 45 miles from shore. A gas-rich area known as the Destin Dome, located in closer-in waters off of Pensacola, Florida, would also become open for drilling.

"We will have a bunch of Senators filibuster this if we have to," Sen. Bill Nelson, D-Fla., complained to reporters. He said that military testing and training is already conducted in the area.

The U.S. Congress has been pushing for greater access to oil and gas supplies since last year, when record-high gasoline prices prompted voter outrage. In 2008, Congress allowed a ban on most offshore leasing to expire. The only areas that remain under restriction are most of the Eastern Gulf of Mexico and some other tracts that are within 100 miles of Florida.

The vote came after the panel rejected a measure to give states along the eastern Gulf of Mexico 37.5% of revenue generated from leasing to oil and gas companies. While coastal states want the money, inland states say it isn't fair to give such a large portion of revenue associated with a national resource to just some states.

Separately, the panel voted to speed up offshore leasing. Under the amendment, from Sen. Lisa Murkowski, R-Alaska, the U.S. would have to offer leases in coastal waters within 180 days after the completion of necessary environmental reviews.  

Copyright (c) 2009 Dow Jones & Company, Inc.



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