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Senate cuts deal on gulf drilling

The compromise: a 125-mile no-drilling zone off the Panhandle, in exchange for more oil and gas exploration.

Published July 12, 2006

WASHINGTON — Senate leaders announced a bipartisan deal Wednesday to open much of the eastern Gulf of Mexico to oil and gas exploration, while providing significant protections for Florida’s west coast over the next two decades.

The compromise would create a 125-mile no-drilling zone off the Florida Panhandle, while the waters off Tampa Bay would be off-limits to drilling for 234 miles. The protections would last through 2022.

Energy companies, meanwhile, would gain access to reserves of oil and natural gas in waters that are now off-limits, and states that allow offshore drilling would earn a larger share of royalties that companies pay for federal drilling rights.

Sen. Mel Martinez, R-Fla., helped broker the deal and said he supports it, though passage by the full Congress is not assured. Sen. Bill Nelson, D-Fla., joined the news conference where the deal was announced but stopped short of endorsing it.

“The devil is in the details, and both Sen. Martinez and I want to see it in writing,’’ Nelson said. “If it is as described to me, it is very promising.’’

The new deal shows that although political pressure to drill off the nation’s coasts is rising with energy prices, the Senate is not ready to adopt the sweeping measure the U.S. House passed last month, which called for opening to drilling all U.S. waters past 50 miles, unless states opted to restrict it up to 100 miles.

Senate Majority Leader Bill Frist, R-Tenn., said the deal strikes an appropriate balance among increasing domestic energy production, protecting Florida’s shores and compensating states that allow offshore drilling. He said he plans to hold a vote this month.

“This is the very best bipartisan bill that the Senate can pass,’’ Frist said as he announced the deal with a half-dozen colleagues in a packed marble alcove outside his Capitol office.

Under terms of the deal, no drilling would be allowed within 125 miles of the Panhandle or in the eastern gulf’s military training zone, which extends to 234 miles off Tampa Bay.

To win the backing of senators from gulf states that allow drilling, the deal promises to give them 37.5 percent of royalties from new leases. Now they get as little as 2 percent.

Meanwhile, about 1.7-million acres of Lease-Sale Area 181, a gas-rich area of the gulf, south and west of the Panhandle, would be open to drilling. So would a 6.3-million-acre block of the gulf directly south, known as Lease-Sale Area 182.

Under existing federal regulations, Area 181 is off-limits to drilling at least through next year, while Area 182 is off-limits for several more years.

Sen. Pete Domenici, R-N.M., chairman of the Senate Energy and Natural Resources Committee, said the portion of Area 181 opened by the deal includes at least 5-trillion cubic feet of natural gas, enough to heat 5-million homes for more than 10 years, and an estimated 1.25-billion barrels of oil.

“It belongs to us, we’re going to drill for it, and deliver it onshore, whatever the price may be,’’ Domenici said. 

“Floridians, let me tell you it’s been a long time coming, but you got great protection, and you can look out and say hundreds of miles away they’re going to be producing crude oil.

“You can’t see it; you won’t even know it’s there.’’

The deal appeared to enjoy bipartisan support, and leaders predicted passage in the Senate. But it came with a major hitch: To maintain that support, particularly from Martinez and Nelson, House leaders must agree to take up the same bill.

Frist said he will take the extraordinary step of asking House Speaker Dennis Hastert to set aside the House-passed drilling bill and hold a vote on whatever bill the Senate passes.

It is far from certain Hastert will oblige, and a spokesman was noncommittal.

Two weeks ago, the House easily passed a bipartisan bill that called for allowing drilling as close as 50 miles from the nation’s Atlantic, Pacific and gulf coasts. States could opt to restrict it for as much as 100 miles offshore, or allow it as close as 3 miles.

The House version has slim chance of passing the Senate, but key House members suggested Wednesday they were not happy with the narrower Senate version, either.

“We don’t think it goes far enough at all,’’ said Brian Kennedy, a spokesman for House Resources Committee Chairman Richard Pombo, R-Calif.

“This is a national problem that needs addressing, not just a regional one that can be addressed in a piecemeal fashion. In that regard, this bill only gets us a third of the way that the House bill gets the country.’’

Unlike in the House, where an off-shore drilling proposal was clearly going to pass this year, the Senate has been moving slowly. Rep. Adam Putnam, R-Bartow, who helped negotiate the House bill, said, “Everybody is elated that the Senate has found the recipe to move something.’’

But he, like lobbyists for major environmental organizations, criticized the Senate deal for failing to provide any protections for the state’s Atlantic Coast or waters south of the Keys.

And while the House bill would have allowed the state Legislature to vote to allow drilling within 100 miles of the coast, its protections would not have expired, like those of the Senate version.

Putnam, the fifth-ranking House Republican, said he also believed it was unlikely House leaders would discard their bill and accept the Senate version for a vote. Normally, the Senate and House reconcile differing versions of bills in a conference committee.

“It’s so unusual for us not to conference a bill, and it would be extraordinarily unusual for that to happen on an issue of this magnitude,’’ Putnam said.

Nelson, Martinez and environmentalists fear a conference committee would produce a prodrilling bill closer to the House’s bill than the Senate’s. It would then be subject to a simple vote in both chambers, with little chance for the senators to use parliamentary procedure to block it.

“Anything other than this I’m not inclined to support,’’ Martinez said. '’But let’s just see what develops.’’

The deal is similar to a compromise that Nelson and Martinez tried to strike early this year that would have created a 150-mile buffer, in exchange for opening much of Areas 181 and all of Area 182.

That plan also called for protecting Florida’s eastern and southern coasts.

The senators indicated Wednesday they don’t mind losing those protections in the Senate deal, because there’s no real threat to drill there, as there is in the gulf. “I’m thrilled and delighted we got 125 miles’’ in the gulf, Martinez said.

[Last modified July 12, 2006, 23:30:10]

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