Los Angeles Times
Oil drilling off Santa Barbara coast? House Republicans say yes
By Richard Simon
June 28, 2013, 10:23 a.m.
WASHINGTON — In spite of a White House veto threat, the Republican-controlled House on Friday launched a new effort to open up the California and Atlantic coasts to oil drilling.
The measure is a long shot in the face of fierce opposition in the Democratic-led Senate and from the White House. Still, Republicans are eager to stoke the debate over offshore drilling and highlight differences between the parties over energy policy heading into next year’s election battles for control of the House and Senate.
The bill, which passed 235-186, would require lease sales by the end of next year for energy production off the coast of Santa Barbara and Ventura counties.
It also would direct the Interior Department to develop a new five-year plan for drilling in areas containing the “greatest known oil and natural gas reserves,” including areas off Southern California, Alaska and the Eastern Seaboard.
Virginia and South Carolina, whose governors have expressed support for offshore oil production, would likely be the first Atlantic states where new coastal drilling would be permitted under the proposed Offshore Energy and Jobs Act.
Offshore drilling has long been a hot issue in California, where a 1969 spill off Santa Barbara devastated the coast. A long-standing ban on new drilling off much of the nation’s coast expired in late 2008, but the Obama administration has kept the Pacific Coast off-limits to new coastal drilling.
The 2010 Deepwater Horizon oil-rig explosion in the Gulf of Mexico, which killed 11 workers and spewed an estimated 4.9 million barrels of oil into the water, led the administration to back off plans to open the eastern gulf and portions of the Atlantic to oil and natural gas exploration.
Republicans argued that the new bill would help lower fuel prices, create jobs, generate $1.5 billion over 10 years for the U.S. Treasury and enhance the nation’s energy security.
“I think, by most standards, that would be considered a fairly good bill,” said Rep. Rob Bishop (R-Utah).
But Rep. Lois Capps (D-Santa Barbara) assailed the House GOP majority for giving “lip service to respecting states’ rights” while seeking to “override the will of voters in my district and my state” opposed to new offshore drilling.
“I get it; this is a message bill,” Rep. Alan Lowenthal (D-Long Beach) added. Rep. Peter DeFazio (D-Ore.) ridiculed the debate as a “Groundhog Day moment for Congress,” noting that similar House-passed bills “never went anywhere in the Senate, and it will meet the same fate again.”
Underscoring the divisions in the California delegation over energy policy, Rep. Tom McClintock (R-Granite Bay) assailed the “ideological extremism” that has put the California coast off-limits to new energy exploration.
Drilling opponents, he said, “have had their way in California for a full generation. I’ve watched their folly take what once could boast of being America’s golden state and turn it into an economic basket case and a national laughingstock.”
The California delegation broke along party lines with Republicans supporting the measure and Democrats opposing it, except for Rep. Jim Costa of Fresno, who voted yes. Reps. Karen Bass (D-Los Angeles), John Campbell (R-Irvine) and Devin Nunes (R-Tulare) did not vote.
The bill directs that new energy production in federal waters off Santa Barbara and Ventura counties occur only from existing offshore platforms or “onshore-based, extended-reach drilling.”
The measure also would offer states 37.5% of the revenues from energy production off their coasts. That provision drew opposition from taxpayer watchdogs that said it would siphon off money the federal government needs.
Wall Street Journal
June 28, 2013, 12:12 p.m. ET
U.S. House Votes to Expand Offshore Oil Drilling
By Tennille Tracy and Keith Johnson
WASHINGTON–The U.S. House voted Friday to open up the Atlantic and Pacific Oceans to oil and natural gas drilling, passing a bill that has little chance of becoming law but marks the latest effort by Republicans to portray President Barack Obama as an enemy of fossil fuels.
The bill forces the Obama administration to offer drilling leases off the coasts of Virginia, South Carolina and California. The administration has not offered leases in these areas although Congress lifted a formal ban on drilling there in 2008.
The bill also directs the Obama administration to revise its five-year leasing plan, which determines which areas will be offered for new drilling in the next five years. Separately, it allows coastal states to collect a portion of federal energy royalties.
The Republican-led House passed a similar piece of legislation last year.
The White House threatened to veto the measure, saying “the bill would undermine the targeted, science-based, and regionally-tailored offshore development strategy” that is currently in effect.
The bill’s passage, by a 235-186 vote, followed the release earlier this week of Mr. Obama’s new climate change plan. The initiative included new rules to limit carbon dioxide emissions from new and existing power plants.
Republicans said Mr. Obama’s plan represented a “war on coal” since coal-fired power plants are among the largest sources of greenhouse gases in the U.S. The power industries have warned that tough new limits on carbon dioxide could force power plants to install expensive upgrades or shut down facilities altogether.
Mr. Obama often boasts of a big uptick in energy production that has happened on his watch. Industry groups, and quite a few lawmakers, just as often decry regulatory roadblocks and bemoan lost opportunities.
The Obama administration’s energy plan will “impose new energy taxes and federal red-tape that will increase energy prices and cost American jobs,” said Rep. Doc Hastings (R., Wash.), chairman of the House Natural Resources Committee and a main backer of the bill passed Friday.
In broad terms, total crude oil production on lands and waters owned by the U.S. government is higher than it was in the last year of the Bush administration, but it was lower in 2012 than in 2009, 2010 or 2011.
But the decline is confined to offshore oil production, especially in the Gulf of Mexico, where production was lower last year than in any of the first three years of the Obama administration. Onshore, the picture is quite different: oil production on federal lands has risen to levels not seen in a decade, and production on Indian lands has tripled, from a pretty small base, during the Obama years.
Gas production is a different story altogether. Even as the U.S. has become the world’s biggest producer, that has happened mostly on private lands. The reason has less to do with regulatory roadblocks, though, than with the fact that the lucrative shale gas plays don’t lie under federal lands. Gas production on federal lands has fallen during the fracking boom every year during the Obama administration.
The Interior Department says it is not wholly opposed to oil drilling in the Atlantic Ocean. It is currently reviewing plans to allow seismic companies to try to determine how much oil and natural gas exists in the U.S. waters there–a move that could pave the way for drilling in a few years.
Unlike energy production in the Gulf of Mexico, which tends to have broad political support in surrounding coastal states like Louisiana and Texas, proposals to drill off the East and West Coasts often generate mixed reactions–if not outright opposition.
Write to Tennille Tracy at Tennille.Tracy@dowjones.com and Keith Johnson at Keith.Johnson@wsj.com
U.S. House Backs Bill to Expand Coastal Oil, Gas Drilling
By Lynn Garner – Jun 28, 2013 8:24 AM PT
Oil and gas exploration off U.S. coasts would be expanded under legislation the U.S. House of Representatives passed over the threat of a presidential veto.
The vote on the bill, H.R. 2231, was 235-186.
The measure would require the Obama administration to conduct additional sales of oil and gas leases off the coasts of Virginia, South Carolina, southern California and Alaska over the next five years, reports Bloomberg BNA.
In addition, it would order the administration to create a plan that would open up almost all of the nation’s coastline for exploration; a draft would be due July 15, 2014, and a final plan approved by July 15, 2015.
“This bill doesn’t harm the environment,” said Washington state Republican Doc Hastings, chairman of the House Natural Resources Committee. “We want to drill safely and responsibly.”
The Senate isn’t expected to take up the legislation.
The White House Office of Management and Budget issued a June 25 statement of administration policy warning of a potential veto. The measure “would undermine the targeted, science-based and regionally tailored development strategy that the American people and the states have helped development,” according to that statement.
The requirement that the Interior Department open new areas for exploration “would be directed without secretarial discretion to determine whether those areas are appropriate for leasing,” the agency said.
Expanded offshore leasing would benefit the large oil companies, which have the resources to finance the high startup costs, according to Bloomberg Government analyst Jason Arvelo. ConocoPhillips (COP), Royal Dutch Shell Plc (RDSA), BHP Billiton Ltd.
(BHP) and Anadarko Petroleum Corp. (APC) were among the most active in the federal offshore leasing circuit in 2012 and 2013.
The large companies would be the most likely to take advantage of the expanded territory available for offshore drilling activities, according to Arvelo.
To contact the reporter on this story: Lynn Garner in Washington at email@example.com
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House moves to expand offshore drilling
Posted on June 28, 2013 at 10:10 am by Jennifer A. Dlouhy
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.
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.
Offshore Drilling Bills’ Sponsors, Cosponsors Received Big Bucks From Oil Industry
By Monica Vendituoli on June 28, 2013 12:30 PM
Sponsors and cosponsors of two bills to expand offshore drilling taken up by the House this week received hundreds of thousands of dollars from the oil and gas industry in the last election cycle.
The first bill passed the House on Thursday by a vote of 256-171. The Outer Continental Shelf Transboundary Hyrdocarbon Agreements Authorizations Act would implement a February 2012 agreement between the U.S. and Mexico to expand drilling along the maritime boundary between the countries in the Gulf of Mexico. Many Democrats opposed the measure in part because it contains language that removes a requirement for companies to disclose payments they make to foreign governments.
The oil and gas industry gave $41,500 to the bill’s main sponsor, Rep. Jeff Duncan (R-S.C.), for his 2012 campaign, making it his top industry donor, according to OpenSecrets.org data.
Oil and gas was also the top industry donor to four of the 17 cosponsors of the bill: Reps. Kevin Cramer (R-N.D.), Doc Hastings (R-Wash.), Doug Lamborn (R-Colo.), and Ted Poe (R-Texas), received a combined $442,000 in 2011-2012: almost $167,000 for Cramer, almost $135,000 for Hastings, more than $64,000 for Lamborn and nearly $76,000 for Poe.
The industry came in second for Reps. Michael McCaul (R-Texas), who received more than $68,000; Markwayne Mullin (R-Okla.), who took in nearly $79,000; and Steve Stockman (R-Texas), who was given $20,500 by oil and gas interests.
The remaining co-sponsors — Reps. Matt Salmon (R-Ariz.), Paul Broun (R-Ga.), Trey Radel (R-Fla.), Mark Amodei (R-N.V.), Tom Graves (R-Ga.), Mark Meadows (R-N.C.), Ann Wagner (R-Mo.), Lynn Westmoreland (R-Mo.), Kerry Bentivolio (R-Mich.) and Joe Wilson (R-S.C.) — received almost $226,000 combined from the industry.
The second bill, the Offshore Energy and Jobs Act, which passed in the House with a vote of 235-188 today, would amend the Outer Continental Shelf Lands Act to boost energy exploration and development on the outer continental shelf.
Many of the same players are involved. It’s sponsored by industry favorite Hastings, and Cramer, Lamborn and Duncan are all among the bill’s 11 cosponsors, as is Rep. Bill Flores (R-Texas). Oil and gas was the top industry donor for all five of them, contributing more than $608,000 in all to their 2012 campaigns.
It was the second-ranking industry for three cosponsors, Reps. Chris Stewart (R-Utah) ($42,000) and Steve Daines (R-Mont.) (more than $108,000) as well as Mullin (almost $79,000).
And it came in third in 2012 for Reps. Dan Benishek (R-Mich.) and Rep. Tom McClintock (R-Calif.), who received more than $92,000 and more than $35,000, respectively.
The other cosponsors were Reps. Doug LaMalfa (R-Calif.), who took in $21,000 from oil and gas in 2012 and Robert Wittman (R-Va.), who has received more than $47,000 from oil and gas throughout his career.
However successfully the industry has invested in the House, the Senate hasn’t acted on similar bills, and the White House strongly opposes both.
June 20, 2013 (note earlier date)
Senator: Coastal states getting raw deal with federal drilling dollars (video)
Posted on June 20, 2013 at 12:39 pm by Jennifer A. Dlouhy
Sen. Mary Landrieu isn’t picking a fight with Wyoming, and she says she has nothing against the Great Plains state.
But the Democratic senator from Louisiana insists Wyoming is exhibit A for her argument that coastal states are getting a raw deal when it comes to collecting federal dollars tied to energy development.
After all, she notes in a new web video that highlights the disparity, in 2011, Wyoming was able to keep nearly $1 billion of the $2.1 billion that energy companies paid the federal government for oil and gas production in the state. At the same time, Louisiana held on to just $26.7 million, out of $5.7 billion that was paid to the federal government for oil and gas harvested in Gulf of Mexico waters near its shores.
The video, released Wednesday, insists this is “an unfair situation,” and touts Landrieu’s preferred solution: legislation she sponsored with Sen. Lisa Murkowski, R-Alaska, that would put coastal and inland states on more even footing.
The measure would expand an existing offshore energy revenue sharing program that is set to begin in 2017 and is limited to four Gulf Coast states (including Texas) so that every state with ocean views can participate and collect up to 37.5 percent of the money. Known as the FAIR Act, the bill also would allow the program to start right away, gradually phase out a $500 million cap on the amount of offshore energy revenues that can be shared with coastal states.
According to one catchy line in Landrieu’s new video, the bill also would treat all forms of energy equally, allowing dollars to be divided up among states whether they come from “oil or gas, wind or wave, onshore or offshore.”
The Senate Energy and Natural Resources Committee is expected to hold a hearing on the Landrieu-Murkowski bill in early July. Sen. Ron Wyden, D-Ore., the panel chairman, has signaled his support – no doubt partly because the latest version of the legislation would allow states to capitalize on renewable energy developments near their shores.
But the proposal is controversial, particularly among offshore drilling foes, who believe the lure of revenue could encourage cash-strapped states to support oil and gas development in nearby waters.
In a March letter to Wyden and Murkowski, eight senators insisted they would “vigorously oppose any effort that expands or provides further incentive for offshore oil and gas drilling in areas where drilling is currently prohibited.”
The critics stress that offshore oil spills don’t linger in one space; instead, they threaten beaches, tourism and coastal economies far from the original site. “Revenue sharing is inherently inequitable because it compensates a single state while other nearby states bear the risk, without receiving any resources to mitigate that risk,” the group said.
Landrieu actually uses a similar argument to push for her bill. She says the 2010 Deepwater Horizon disaster underscored the potential danger for coastal communities that sustain oil and gas drilling in the Gulf of Mexico – and illustrates the need for them to cash in on more of the development: “The Gulf contributes to the U.S.’ energy security and economic vitality. One-third of domestic seafood is produced in the Gulf. It drains 40 percent of the North American continent. And the oil and gas produced off its shores fuels cars, heats homes, keeps the lights on and creates hundreds of thousands of jobs. To keep doing all of these critical things, coastal communities deserve a fairer partnership with the federal government to make their communities more resilient,” the narrator in her web video says. “The revenues kept in Louisiana under the FAIR Act will allow it to rebuild its eroding coast, protect its coastal communities from storms, create jobs and preserve a unique and treasured culture.”
Broader offshore energy legislation pending in the House of Representatives contains a similar revenue sharing proposal. But that bill is controversial because it would also force the Obama administration to sell oil and gas leases off the coasts of California, South Carolina and Virginia.
The issue could end up being a thorny one for Senate Democratic leaders. Despite the strong opposition from some Democrats – including Majority Whip Dick Durbin, D-Ill., and Senate Environment and Public Works Committee Chairwoman Barbara Boxer, D-Calif. – revenue sharing could be important to the political futures of some in the party.
Landrieu and Sen. Mark Begich, D-Alaska, (who has his own revenue-sharing proposal) both face tough reelection contests next year. For those senators, passing an offshore revenue-sharing plan could be a hit with some key voters back home. The same may also be true for some inland senators representing oil patch states, such as Sen. Mark Pryor, D-Ark.
Special thanks to Richard Charter