House scraps offshore drilling ban

The U.S. House of Representatives on Thursday voted to scrap a 25-year-old federal ban on most offshore oil and natural gas drilling, allowing energy exploration 100 miles from the coastline, and possibly within 50 miles unless states say no.

The Deep Ocean Energy Resources Act, which passed 232-187, could open up waters off the east and west coasts and in the eastern Gulf of Mexico off Florida, collectively known as the Outer Continental Shelf (OCS).

“Our OCS is loaded” with oil and natural gas, said Rep. John Peterson, Pennsylvania Republican, one of the bill’s co-sponsors. “It could supply us for decades.”

“I find it strange that people who live so far from the action have all the answers,” said Rep. Alcee Hastings, Florida Democrat, criticizing lawmakers from inland states who called for more drilling off his state’s coast.

Currently, federal offshore drilling is allowed only in Alaska, Alabama, Louisiana and Texas.

The bill still must be reconciled with a narrower plan yet to pass the Senate which would allow drilling in nearly 3 million acres of federal acres in federal waters in the eastern Gulf of Mexico known as Lease Sale 181. The House bill is unlikely to emerge from any bargaining session with the Senate in its current form.

The House bill would require energy companies with existing leases to drill in federal waters to renegotiate their deals or face a “conservation fee” that would tack $9 a barrel of oil or $1.25 per thousand cubic feet of natural gas onto what they produce.

The White House said it strongly opposes the renegotiation provision even though the current deal struck with energy firms could lose the federal government up to $10 billion over the next 25 years.

The House bill distributes billions of royalty dollars to coastal states that allow drilling, which also drew a rebuke from the White House.

Revenue-sharing provisions in the bill could reduce federal receipts by “several hundred billion dollars” over 60 years, the White House said.

The White House wants more OCS drilling, but “strongly opposes” provisions that would share up to 64 percent of revenues from drilling in federal waters within 12 miles of shore with adjacent states, its Office of Management and Budget said.

According to the Congressional Budget Office, Congress’ nonpartisan watchdog, the bill would produce $900 million in federal funds from 2007 to 2016. Most of the bill’s cost are pushed out beyond the CBO’s 10-year window of analysis, Democrats said.

The House bill would permanently ban drilling within 50 miles of a state’s coastline.

Natural gas drilling would be allowed between 50 and 100 miles offshore, unless a state called for a ban within one year after the bill is signed into law.

States would have much longer, until June 30, 2009, to enact bans on oil drilling from 50 miles to 100 miles offshore.

Exploration for oil and gas would be allowed anywhere beyond 100 miles.

Some 40 Republicans pressed for an amendment raising automobile fuel efficiency standards to 33 miles per gallon by 2016 from 27.5 mpg currently, but party leaders refused to allow a vote.

“It’s astonishing that this House would debate opening the entire coast of the United States to oil drilling when we haven’t voted on a single significant bill this year to increase conservation,” said Rep. Sherwood Boehlert, New York Republican.

© 2006 Reuters