House Republicans Press Leaders to Hang Tough on OCS Plan

Over three dozen House Republicans are urging their leaders to "firmly support" the broad, House-passed offshore drilling legislation in the face of pressure to accept a narrower Senate-passed plan.

"Despite the fact that our Founding Fathers deliberately created two branches of the legislature so that there would be debate and compromise, some Senators have expressed the view that they do not want an energy bill that comes out of conference to differ at all from the Senate-passed version," the conservative Republican Study Committee says in a letter sent late last week.

The letter signed by roughly 40 members says the Senate plan "does not go far enough to create and expand untapped domestic sources of energy." It is addressed to House Speaker Dennis Hastert (R-Ill.), Majority Leader John Boehner (R-Ohio) and Majority Whip Roy Blunt (R-Mo.)

The letter comes as House and Senate lawmakers are determining whether they can reconcile competing offshore leasing plans this year. The Senate passed legislation last month that allows industry access to an additional 8.3 million acres in the Gulf of Mexico, while the House plan provides new gulf access but also lifts offshore drilling bans that apply to other areas.

The House bill would scrap current offshore leasing bans that cover most areas outside the western and central Gulf of Mexico. It replaces them with a system under which drilling would be allowed in all areas beyond 100 miles from state shores. Leasing would take place between 50 and 100 miles unless states block it, while leasing closer than 50 miles from shore would remain banned unless states seek it.

Both bills feature plans to share offshore production revenues with states that have oil and gas leasing off their shores. The Senate plan is less generous and is limited to the four Gulf Coast producing states -- Louisiana, Mississippi, Alabama and Texas.

"Arbitrarily centralizing energy production only in the Gulf of Mexico, as the Senate bill does, is foolhardy because it endangers the stability of our domestic oil and gas supply and increases the possibility of dramatic spikes in prices," the letter states, adding that last year's gulf hurricanes, which greatly slowed production, show the need to tap areas outside the region.

In addition, the letter cites Congressional Budget Office estimates showing that over five years, the House plan would reduce mandatory spending by $2.3 billion, while the Senate plan would reduce it by $241 million over the same time. This federal money that comes in from the House bill stems from leasing in new coastal areas as well as provisions aimed at recouping federal losses from flaws in the "royalty relief" program for deep water gulf producers.

But critics of the House bill note these savings are short-lived and say the bill contains unacceptable long-term costs once its generous revenue sharing provisions -- which cover both existing and new leases -- are fully phased in. The White House has criticized the long-term costs of the bill, citing billions of dollars in lost federal receipts over the next 60 years.

Copyright 2006 Greenwire. All Rights Reserved. Visit E&E Publishing for a free trial.

For More Information on the Offshore Rig Fleet:
RigLogix can provide the information that you need about the offshore rig fleet, whether you need utilization and industry trends or detailed reports on future rig contracts. Subscribing to RigLogix will allow you to access dozens of prebuilt reports and build your own custom reports using hundreds of available data columns. For more information about a RigLogix subscription, visit