[StBernard] Coastal states hijack energy policy.

[Westley Annis]

Robbing the Feds
Coastal states hijack energy policy.

Sunday, July 16, 2006; B06



LAST MONTH the House voted to lift the moratorium on offshore oil and gas
drilling that has held for 25 years in most U.S. coastal waters. The bill's
central thrust was right -- offshore drilling can be done safely -- but it
contained several flaws, not least excessive generosity to coastal states,
which would pocket an estimated $69 billion over 15 years at the expense of
the federal budget. Now the Senate leadership may vote on a bill that bows
to coastal states again. The Bush administration and leaders in both
chambers need to stand up for federal interests.

The Senate bill is narrower than the House one. Rather than lift the
drilling moratorium in all U.S. coastal waters, the bill restricts drilling
to 8 million acres in the eastern Gulf of Mexico. Because the moratorium was
scheduled to expire in part of this area anyway, the incremental effect of
the Senate plan would be to open up only 0.4 percent of the natural gas
reserves and 1.5 percent of the oil reserves that are thought to exist in
the Outer Continental Shelf. For this modest concession, the coastal states
that traditionally resist offshore drilling would be handsomely rewarded.

For Alabama, Mississippi, Louisiana and Texas, the reward would be
financial. These states pocket as little as 2 percent of the royalties from
the offshore drilling that's already allowed in the western gulf. Under the
Senate plan, the states' share of the royalties from new drilling leases
would rise to 37.5 percent.

For Florida, meanwhile, the reward would take the form of a statutory ban on
drilling anywhere near its coast. Whereas the House bill would ban drilling
within 50 miles of the shore and allow states to extend that to 100 miles,
the Senate would allow no drilling within 125 miles of Florida's shore, and
some parts of the state would get a buffer zone of more than 200 miles.
Given that offshore drilling may pose smaller environmental risks to
Florida's coast than the alternative of bringing oil in by tanker, this
protection is excessive.

The coastal states don't deserve billions of dollars in royalties from oil
and gas that lies in federal waters. Nor does it make sense to replace the
current moratorium on drilling, which is renewed from year to year and could
thus potentially be lifted soon, with a statutory ban that would last until
2022. Balancing the nation's need for energy against its environmental
concerns is always hard. But that's not a reason to allow coastal states to
hold the rest of the nation to ransom.

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