Gulf drilling area widened
WASHINGTON – Congress approved expanded offshore drilling in its final hours, giving energy companies access to oil and natural gas deposits in a vast area once off-limits in the Gulf of Mexico.
President Bush, who is expected to promptly sign the legislation, said it “will help to reduce our dependence on imported sources of energy by increasing access to domestic sources of oil and gas (and) … strengthen our energy security.”
Opponents of the bill said its revised formula for sharing royalties from energy production in federal waters – which will funnel billions of dollars to four Gulf states – would cut into government revenue at a time of huge deficits.
The legislation opens 8.3 million acres of Gulf waters 125 miles from the Florida Panhandle. The bill calls for the Interior Department to begin offering leases within a year. Actual production likely would be at least four or five years away.
The area is believed to have 1.3 billion barrels of oil and 6 trillion cubic feet of gas, enough to heat 6 million homes for 15 years. The country uses about 21 million barrels of oil a day.
The bill also will produce a revenue windfall for Louisiana and three other Gulf coast states. For the first time, the states will get 37.5 percent of royalties from oil and gas production in federal waters off their coastlines. They now get royalties only from production in close-in state waters.
Louisiana, which has the most production off its coast, estimates it will receive more than $13 billion over 30 years as part of the revenue sharing, according to Sen. Mary Landrieu, D-La.
But Rep. Ed Markey, D-Mass., called it a raid on the U.S. Treasury and Rep. Lois Capps, D-Calif., questioned sending so much money to four states in the face of government deficits.