5. OFFSHORE DRILLING:
Lawmakers urge codification of Obama lease extensions
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Gulf Coast lawmakers today said legislation is needed to ensure that the Obama administration fulfills its promise to extend leases for oil and gas companies whose operations were delayed by last year's BP PLC oil spill and deepwater drilling moratorium.
Sen. Kay Bailey Hutchison (R-Texas) today said Obama's proposal announced last weekend leaves too many unanswered questions and does not indicate which leases will be extended or for how long.
Hutchison urged the Senate Energy and Natural Resources Committee to advance S. 516, which she introduced in March with Sen. Mary Landrieu (D-La.) to allow leaseholders to use the full leases by extending terms for 12 months.
"The Gulf of Mexico is one of the most important regions in the country for exploration and production," Hutchison told the panel during a hearing on a handful of oil and gas drilling proposals. "Our bill answers those questions and leaves no room for confusion."
Gulf lease extensions were among a suite of actions Obama announced Saturday, in addition to better coordination of federal permitting of Arctic drilling, plans to hold annual lease sales in Alaska's National Petroleum Reserve and an expedited review of potential oil and gas resources in the mid- and South Atlantic.
The measures were to be paired with proposals to repeal oil industry tax breaks and implement incentives to encourage leaseholders to initiate production on dormant leases, a measure Obama said would help boost domestic energy supplies.
Michael Bromwich, director of Interior's Bureau of Ocean Energy Management, Regulation and Enforcement, said today his agency has granted each of the 10 requests for lease extensions it has received since the Deepwater Horizon incident and that it is working to develop clearer criteria for granting future extensions.
"We'll have to define those in clear enough terms so there are standards that everyone understands," he told reporters after testifying at today's hearing. He added that the agency has thus far been "extraordinarily liberal" in granting extensions for leaseholders that have been "stopped from doing work or anticipated doing work."
But the definition of which leases have been "impacted" by the moratorium, as Interior Secretary Ken Salazar put it, and which would receive extensions, remains unclear. Bromwich said extension requests from companies whose leases expire in 2019, for example, would be "premature."
"It leaves a lot of questions unanswered," Hutchison said. Language from her bill was folded into a bill by House Natural Resources Chairman Doc Hastings (R-Wash.) that passed that chamber last week.
Language identical to Hutchison's bill is also included in a sweeping proposal, S. 953, by Senate Minority Leader Mitch McConnell (R-Ky.) set to receive a procedural vote tomorrow.
McConnell's bill, which mirrors many of the provisions in Hastings' drilling bills, would also require Interior to hold lease sales in the next couple of years in the Gulf, off the coast of Virginia and in the Arctic's Beaufort and Chukchi seas.
It would also force Interior to follow 60-day deadlines to evaluate drilling proposals while requiring drillers to demonstrate and verify oil spill containment capabilities.
The bill would need to earn support from several Democrats in order to advance. But Alaska Sen. Mark Begich, a key Democratic supporter of expanded oil and gas development, today said McConnell's bill fails to include a revenue sharing provision for coastal states.
While he is undecided on the measure, he called the lack of revenue sharing a "glaring" omission.