Gulf Of Mexico Energy Bill Passes

Dec 8: In last minute actions of the Republican-controlled Congress, S. 3711, the Gulf of Mexico Energy Security Act [aka OCS legislation, See WIMS 12/6/06], was added to H.R. 6111, an unrelated vehicle bill to amend the Internal Revenue Code of 1986. The bill pass the House by a vote of 367-45. Later, at 1:49 AM Saturday, the Senate approved the measure by a vote of 79-9.

The bill would open two areas of the Outer Continental Shelf (OCS) for oil and gas development. The bill passed the Senate on August 1, 2006 by a bipartisan vote of 71-25. S. 3711 would open 8.3 million acres in Lease Sale 181 and Lease Sale 181 South for oil and gas exploration. The government estimates that the region contains 1.26 billion barrels of oil and 5.8 trillion cubic feet of natural gas -- enough to heat six million homes for 15 years. The bill would also share production revenues with Alabama, Louisiana, Mississippi and Texas.

In remarks on the Senate floor, Senate Majority Leader Bill Frist characterized the legislation as “one of the most significant accomplishments of the 109th Congress which will have a lasting impact on American consumers and our economy.” Senator Pete Domenici (R-NM), Chair of the Senate Energy & Natural Resources Committee and one of the chief sponsors of the bill said, “The OCS legislation is very important and should be something that everybody in this chamber is proud of. It is particularly fitting that the Senate pass the bill just as the cold winter was setting in and as families start seeing a sharp rise in their natural gas bills. The price of natural gas has more than doubled since October. We aim to ease the gas price volatility by increasing supply.”

Also, referring to the fact that the legislation was part of a larger package that included several energy tax provisions to encourage more renewable energy, more clean energy and the increased conservation of energy, Domenici said, “I think it’s fitting that we passed legislation that develops more oil and gas in tandem with a tax package that will increase the production of electricity from wind and solar power and help government, businesses and homeowners conserve energy and use it more efficiently.”

Senator Mary Landrieu (D-LA), who crafted a compromise bill with Domenici said, "Today the Senate confirmed its strong support for Louisiana and the entire Gulf Coast by passing the Domenici-Landrieu fair-share bill, which after nearly 60 years, provides for Louisiana a significant share of oil and gas revenues produced off our shores. In August, 71 Senators agreed to the bill because they recognized that a dedicated stream of revenue is necessary for Louisiana to protect itself from future storms. Katrina and Rita showed us what devastation can ensue if our communities remain vulnerable."

Under the legislation, 37.5 percent of offshore revenues will go to Louisiana, Texas, Mississippi and Alabama. The funds are specifically dedicated to coastal wetlands restoration, hurricane protection, levee and flood control projects in the four energy-producing states. An additional 12.5 percent is dedicated to the state side of the Land and Conservation Fund, which funds the acquisition of parks and green spaces across the country.

Senator Landrieu thanked many interest groups who helped in the passage of the bill including: America's WETLAND Campaign to Save Coastal Louisiana; Parishes Against Coastal Erosion; Coalition to Restore Coastal Louisiana; Women of the Storm; Levees.org; Coast Guardians; National Association of Manufacturers (NAM); the American Chemistry Council (acc); the Consumer Alliance for Energy Security; the Agriculture Energy Alliance and "countless others."

Natural Resources Defense Council (NRDC) issued a statement saying that the lame-duck Congress was sneaking "in a measure endangering this fragile coast by opening up 8.3 million previously protected acres to oil and gas drilling." They said, "Rather than permanently redirecting oil royalties from off-shore drilling to the coffers of just four states, Congress should commit the necessary funds for restoration but should also make oil and gas companies pay their fair share for repairing wetlands and pay their full share of royalties to the American people for drilling both on- and off-shore. And Congress should now turn its attention to ending our addiction to oil." Sierra Club also opposed the bill.

Access legislative details for the vehicle bill, H.R. 6111 (click here). Access the legislative details for the original S. 3711 (click here). Access a lengthy statement from Senator Domenici (click here). Access a statement from Senator Landrieu (click here). Access a statement from ACC (click here). Access a statement from NAM (click here). Access a release from the U.S. Chamber of Commerce (click here). Access a release from NRDC (click here). Access a release from Sierra Club (click here). Access the latest media reporting on the voting activity (click here). [*Energy]