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After Being Denied Arctic Refuge, House Loosens Restrictions on Offshore Drilling

From News Reports

Washington -- The House approved a bill Thursday that could dramatically boost offshore drilling across the nation by offering coastal states a huge slice of billions of dollars in federal royalties if they allow oil and gas rigs off their shores.

The measure would scrap the 25-year federal ban on drilling off most of the Pacific and Atlantic coasts and parts of the Gulf of Mexico, which most California officials argue has protected the state's coastal ecosystems and its beach-dependent tourism industry.

The 232-187 vote Thursday night capped one of the most contentious debates on an environmental issue in recent years. The bill faces much steeper opposition in the Senate, where Florida's two senators have already pledged to thwart it using a filibuster.

The measure has received only lukewarm support from the White House, which is concerned the revenue-sharing provisions could worsen the federal budget deficit by depriving the Treasury at least $20.6 billion by 2017.

But the bill's sponsors, including its chief author Republican Rep. Richard Pombo, say the offer of cash assistance to states is the best way to persuade coastal lawmakers to overcome their resistance to drilling offshore.

"Our energy policy is 'no,' " Pombo, the chairman of the House Resources Committee, said on the House floor. "For 30 years, we've had the same people coming down here making the same arguments as to why we can't develop our domestic energy sources. It doesn't matter if it's natural gas or oil or hydro or solar or wind. ... There's always a reason to be a 'no.' "

But Democrats, in turn, accused the bill's sponsors of crafting a massive giveaway of federal money that will primarily benefit four coastal states that already produce oil and gas offshore --Texas, Louisiana, Mississippi and Alabama.

"This is a fiscal nightmare," said Rep. Edward Markey, D-Mass, pointing to a chart showing the billions of dollars that would flow to the Southern states. "This money should remain in the budget for our troops in Iraq, it should remain in the budget for Medicare recipients, it should remain in the budget for the poor children of our country."

The measure's revenue-sharing provisions, written by Louisiana lawmakers, were designed to provide generous incentives to drill. Under the bill, states -- which currently receive less than 5 percent of oil and gas royalties -- would see their share jump to 50 percent over 10 years. Eventually they could get as much as 75 percent of royalties from drilling.

Of the $20.6 billion that would flow to the states over the next decade, all but $1.7 billion would go to those four states, according to the Congressional Budget Office. Louisiana's share is estimated at $8.6 billion.

Gulf Coast lawmakers argue the windfall is only fair because states that produce energy on public lands onshore already benefit from revenue-sharing. Louisiana officials said the new money could help restore coastal wetlands and repair New Orleans' storm-battered levee system.

The debate Thursday was fierce, but the vote broke more along lines of geography than the House's usual partisan divide.

Forty Democrats voted with the GOP majority to pass the bill, with many of the votes from Democrats from the South and Midwest. Thirty-one Republicans voted against the measure, including many from coastal states that oppose drilling such as Florida, New Jersey and New York.

Critics of the bill, including some Republicans, complained it would force coastal states that oppose drilling to jump through bureaucratic hoops to protect their coasts. Under the bill, states would have to petition the Interior Department every five years to block drilling in federal waters 50 to 100 miles off the coast.

"This bill does far more than simply lift the long-standing moratoriums on drilling," said Rep. Sherwood Boehlert, R-N.Y., a chief critic of the measure. "The bill makes it difficult for a state to bar drilling. We should not be opening all of our coasts to oil drilling when we have not taken the first step to conserve oil" adding that the bill "pretty much defines 'travesty."'

House leaders refused to consider an amendment by Boehlert that would have required an increase in federal fuel efficiency standards. Lawmakers also soundly defeated an amendment pushed by Rep. Michael Bilirakis, R-Fla., that would have given states the authority to protect their coasts out to 125 miles.

A key aspect of the bill would be to give the Interior Department complete control over federal waters 100 to 200 miles from shore. While that portion of California's coast is considered too deep to drill with today's technology, other areas across the country could be opened to deep offshore wells.

Supporters of the bill say America needs to develop more of its offshore oil and gas reserves to avoid increasing its dependence on foreign sources and losing an edge to competitors.

Democrats argued the most energy-rich portions of the so-called Outer Continental Shelf -- in the western and central Gulf of Mexico -- already are open for oil and gas leasing. The bill's sponsors countered that the federal moratorium has closed off more than 80 percent of federal waters to development.

House Democratic leader Nancy Pelosi of San Francisco said the 1969 blowout at an oil rig near Santa Barbara, which blackened miles of coastline, should remind lawmakers of the risks of drilling.

"We have learned from bitter experience that a large oil spill can cause long-lasting damage to the marine ecosystem at all levels," she said.

The bill includes a provision that allows for a swap of existing leases off the coast of California for leases in new areas opened up for drilling. Pombo, who negotiated the package, said the measure is California's best hope to permanently protect its coast.

"Right now the state of California controls 3 miles off our coasts. This bill gives our state 100 miles," Pombo said.