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BP's Thunder Horse semi-submersible facility in the Gulf of Mexico, about 150 miles southeast of New Orleans. (Photo courtesy BP)The House on Friday passed legislation that would expand offshore drilling by forcing the federal government to sell new oil and gas leases along the coasts of California, South Carolina, Virginia and any other states where governors say they want the work.
But the measure, which passed on a mostly party-line vote of 235-186, is not expected to advance in the Democrat-controlled Senate, much less clear the chamber with enough support to overturn a threatened veto by President Barack Obama.
Beyond targeting California, South Carolina and Virginia for offshore oil drilling, the bill would limit environmental reviews of the mandated lease sales, forcing federal regulators to study the implications of oil exploration in all three areas simultaneously, rather than with separate, area-specific studies.
At the same time, it would force the Interior Department to focus all future oil and gas leasing plans to areas with the most potential. Regulators would have to sell leases in areas estimated to contain more than 2.5 billion barrels of oil or more than 7.5 trillion cubic feet of natural gas — or if the adjacent state governor asks for the auction.
The measure also would slowly phase in a program for coastal states to collect a share of federal revenues tied to offshore oil and gas development. Although far less aggressive than the leading Senate revenue-sharing proposal, the House measure is opposed by offshore drilling foes who say it could lure even skeptical state leaders to support coastal oil exploration as a way to raise money.
By a vote of 238-185, the House adopted an amendment by Rep. Bill Cassidy, D-La., that would give Gulf Coast states a chance to score even more money from nearby drilling, by boosting a $500 million cap on the amount they can collect under a revenue-sharing program set to begin in 2017. Cassidy’s amendment set the annual threshold at $999 million.
Related story: Louisiana senator makes pitch for drilling dollars
Rep. Doc Hastings, R-Wash., who sponsored the underlying bill, said it would put the U.S. “back on the right path,” by creating 1.2 million American jobs, lowering energy prices and generating an estimated $1.5 billion in new revenue to the federal government.
But critics said the legislation would radically and irresponsibly expand offshore drilling, while short-circuiting environmental reviews of the work and before Congress makes some major changes called for in the wake of the 2010 Gulf oil spill.
“The bill . . . would allow Big Oil to put drilling rigs off the Atlantic, Pacific and Alaskan coasts without enacting key drilling safety reforms that we know should be there following the BP Deepwater Horizon disaster,” said Rep. Rush Holt, D-N.J.
Rep. Bill Pascrell, D-N.J., said the “bill would completely rewrite the administration’s plan for offshore leasing in a reckless and irresponsible manner.”
The Interior Department took steps administratively to boost offshore drilling safety after the Gulf spill, including a sweeping reorganization of the agency that oversaw coastal oil and gas development. Regulators also began requiring companies to prove they can rein in a subsea blowout before getting approval to drill deep-water wells, imposed new well design standards and set new testing requirements for essential emergency equipment.
Hastings’ bill would largely codify the reorganization of agencies that oversee offshore drilling, but it does not include a plan to hike oil spill liability for companies working on the outer continental shelf.
One of the last acts before lawmakers head home for a week-long July 4 recess, passage of the bill gives political ammunition to Republicans as motorists hit the highway — and fuel up at filling stations — for summer vacations.
More domestic oil and gas development means lower fuel prices, Republicans said on the House floor.
Rep. Jeff Duncan, R-S.C., stressed wider economic benefits of expanded drilling, well beyond the Gulf Coast.
“The first domino is the jobs that are created on the offshore rigs,” he said. “But if you ride on Highway 90 from Lafayette, La., down toward New Iberia and Houma, La., you’re going to see on both sides of the road, business after business after business that is supporting the offshore industries.”
“This is a true job creator,” he added.
Democrats cast the bill as nothing more than a political messaging measure that faces certain death in the Senate.
Rep. Alan Lowenthal, D-Calif., called the legislation “a messy conglomeration of retread ideas that wastes this chamber’s time,” since portions of the bill “have been rejected by the Senate, by many of the affected states, and have a zero chance of being signed by the president.”
Rep. Gene Green, D-Houston, acknowledged the bill was meant to send a message _ but said that’s exactly why he was backing the legislation, despite some concerns.
“While I do not agree with some of the environmental provisions in this bill, I support it because it is a message bill about the importance of accessing our offshore resources,” Green said. “With the president reneging on certain areas originally contained in his 2012-2017 five-year offshore leasing plan, our future access over the next decade is extremely limited. We need to open new offshore areas up for production instead of producing on the same lands we have for decades.”
The Interior Department’s current five-year plan, which lays out the schedule for offshore lease sales through June 30, 2017, includes a dozen auctions of territory in the Gulf of Mexico and three of tracts near Alaska. But regulators at the Interior Department’s Bureau of Ocean Energy Management opted not to plan an auction of leases near Virginia, where a sale had previously been scheduled (and canceled after the 2010 Gulf spill). Some Alaskan areas and southern California acreage, near existing development, also were left out of the plan.
Republicans turned back a bid by Democratic Rep. Lois Capps to strip out the bill provisions requiring a sale of offshore oil and gas leases near her home state of California. By a vote of 235-183, the House also rejected an amendment offered by Rep. Peter DeFazio, D-Ore., that would have blocked future oil and gas development in Alaska’s Bristol Bay.
