A Review of the Nigerian Energy Industry

US House Rejects Obama Offshore Drilling Plan

Karen Boman

27 July 2012, The U.S. House of Representatives on Wednesday rejected the Obama administration’s proposed five-year offshore drilling plan, replacing it with legislation that would implement a new drilling plan.

The House voted 253-170 in favor of replacing Obama’s proposed plan with H.R. 6082, which would expand the number of lease sales held, and would open up for leasing tracts on the Outer Continental Shelf offshore southern California and Virginia.

Under the president’s proposed plan, a lease sale is scheduled for offshore Virginia in 2017, while the schedule proposed under H.R. 6082 calls for a Mid-Atlantic lease sale in 2013.

“President Obama’s rewritten offshore plan represents a giant step backwards for American offshore energy production and a giant lost opportunity to create over a million new American jobs,” said House Natural Resources Chairman Doc Hastings (WA-04), who introduced the legislation on July 9.

Hastings said the areas where the lease sales occur in H.R. 6082 are those known to contain the greatest known amounts of oil and natural gas resources, which will provide new opportunities for increased energy production and job creation.

Hastings and other critics of Obama’s proposed plan, which was delivered for Congressional review on June 28, have said Obama’s plan would keep 85 percent of America’s offshore areas off-limits to energy production.

The U.S. Senate also is seeking to overturn Obama’s proposed drilling plan. On Wednesday, six senators – which include Lisa Murkowski (R-AK), Jim Inhofe (R-OK), John Hoeven (R-ND), Mary Landrieu (D-La.), Jim Webb (D-Va.) and Mark Warner (D-Va.) – introduced into the Senate the Offshore Petroleum Expansion Now Act of 2012 into the Senate, also to replace the president’s proposed offshore lease sale plan.

Under current law, the president must submit his five-year plan to Congress for a mandatory 60-day review. The legislation proposed by the senators would replace within the 60-day Congressional review period under the Outer Continental Shelf Lands Act, President Obama’s Proposed Final Outer Continental Shelf Oil & Gas Leasing Program for 2012-2017.

Under the proposed legislation, also called the OPEN Act, an additional dozen lease sales would be added to the existing list of lease sales, and includes multiple area-wide sales in Alaska’s Beaufort and Chukchi seas. The president’s proposed plan includes 12 lease sales in the Gulf of Mexico, one in Alaska’s Cook Inlet, and two potential sales in Alaska’s Arctic.

The bill would also ensure that states receive a fair share of the revenue generated off their coastlines, something that has been lacking in other drilling legislation, said Landrieu.

“Energy exploration and subsequent production within the Virginia Outer Continental Shelf – if coupled with environmental protections and equitable formula for sharing revenues between the state and federal governments – would boost domestic energy supplies, while benefiting the Commonwealth’s economy,” said Webb, who has repeatedly called for Virginia’s inclusion to the administration’s five-year oil and gas leasing plan.

“The House has voted on a bipartisan basis to reject President Obama’s proposed offshore drilling plan and replace it with a bipartisan plan that will expand offshore energy production and create jobs,” said Hastings. “I’m pleased that a bipartisan group of Senators has introduced legislation to do the same.”

Congress will have 60 days to review President Obama’s proposed plan.

“The president’s plan is unacceptable and failure to act by the Senate would be an active endorsement of the President’s no-new-drilling, no-new-jobs plans,” said Hastings. “The Senate must vote before the 60-day clock runs out.”

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com. This pieces was culled from Rigzone

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