Congress OKs Energy Recovery in Central Gulf

Published February 1, 2007

On the final day of its 2006 session, Congress approved legislation opening 8.3 million acres in the Gulf of Mexico to oil and natural gas recovery.

The law became possible when the House of Representatives, which had previously approved a far more comprehensive bill, gave in to Senate pressure to limit the amount of resource recovery allowed.

The final legislation applies solely to deepwater areas in the Central Gulf.

Preexisting moratoria on resource recovery in energy-rich areas off the Atlantic and Pacific coasts and in the Eastern Gulf of Mexico remain in place under the final bill. The new area is estimated to add 1.26 billion barrels of crude oil and 5.8 trillion cubic feet of natural gas to domestic energy supplies.

House Sought Broader Bill

Under a House bill passed last summer, resource recovery would have been allowed more than 100 miles from the Atlantic and Pacific coasts and the Gulf Coast states.

The Senate held firm, however, in its demands that no resource recovery be allowed within 235 miles of the Florida Gulf Coast or within 125 miles of other Gulf Coast states. In addition, the Senate refused to open any areas off the Atlantic or Pacific Coasts.

Mixed Reaction

Reaction to the approved legislation was mixed.

Consumer advocates and proponents of natural resource recovery generally welcomed the opening of portions of the Central Gulf for resource recovery, but were disappointed that far more areas remain off limits.

In a statement on its Web site, the Independent Petroleum Association called the final legislation “a necessary first step to improving American energy security” but lamented, “The federal government still maintains its unnecessary moratoria on the East and West Coasts as well as the Eastern Gulf of Mexico.”

Myron Ebell, director of energy policy at the Competitive Enterprise Institute, said, “Unlike the outstanding bill passed by the House earlier this year, the Senate bill simply doesn’t have any additional energy in it.

“American consumers deserve legislation that will significantly increase domestic oil and gas production,” Ebell explained. “At some point, the Congress is going to have to confront the fact that domestic oil and gas production is declining because the United States is the only country in the world with significant offshore resources that isn’t actively developing them.”

James Hoare ([email protected]) is an attorney practicing in Syracuse, New York.