Congress to Send Oil Drilling Legislation to the President

Providing a consolation prize to energy exploration advocates, Congress has passed a bill which will allow, for the first time, oil and natural gas exploration in the deepest waters off Florida's Gulf Coast. The bill will be sent to the President for his signature in the coming days. The final approval to the bill came in the waning moments of 109th Congress, but falls far short of the legislation proposed and passed by the House of Representatives earlier this year. With the Democrats poised to sweep into power in January, less-aggressive Senate version was the best that supporters of offshore drilling could hope for.

Dan Kish, Senior Advisor to the Chairman of the House Resources Committee, told MarEx today, “This is the first time 25 years that Congress has done anything positive for continental shelf.” He went on to explain that 97% of the US offshore continental shelf is off-limits to energy exploration and that the 8 millions acres opened up by the legislation was “a drop in the bucket.”

The bill that will reach the President’s desk will be far less comprehensive than the one passed by the house earlier this year. That bill called for energy exploration in areas beyond the Gulf of Mexico, among other things. The need for more significant revenue sharing to coastal states was also addressed within the bill.

The stalled ANWR drilling legislation and the sweeping midterm victories by the Democrats meant that energy legislation in the New Year would face a tough, uphill battle. Hence, the measure represents a significant victory for the oil industry and a major defeat for the environmental lobby. Dan Kish does not think the measure goes far enough. “If people were really concerned about the treasury and the energy situation, then they’d open up more of these areas to drilling.”

The bill, when signed by the President, will allow exploration in large area of the Gulf of Mexico, stretching from Florida’s panhandle westward in the deep waters of the outer continental shelf. While both of Florida’s US Senators voted for the bill, the Florida House delegation split largely along party lines on the issue. In the House, the bill passed by a 367-45 vote. Early on Saturday morning, the Senate passed the measure in a 79-9 vote.