Senate bill would extend deepwater offshore drilling leases

McClatchy NewspapersMarch 9, 2011 

WASHINGTON — Senators said Wednesday that a bill extending exploratory leases in the Gulf of Mexico will encourage drilling — and help bring down the price of oil.

"All offshore energy producers in the Gulf of Mexico are currently being penalized for the mistakes of a few companies responsible for the Deepwater Horizon accident," said Sen. Kay Bailey Hutchison, R-Texas, referring to the April 20, 2010, BP drilling rig explosion that sent oil flowing into Gulf of Mexico for three months. A little more than a month after the blowout, the Interior Department issued a six-month moratorium on all deepwater offshore drilling.

"The drilling moratoria forced energy producers with exploratory leases to sit idle while still having to pay the expenses of the lease and their employees," Hutchison said. "This is fundamentally unfair."

Sen. Mary Landrieu, D-La., is a co-sponsor of the legislation.

"It's time for this administration to be a better partner to this industry," said Landrieu, who's been a vocal critic of the Obama administration's handling of the spill and the drilling ban. She criticized the Interior Department for following the six-month moratorium with a "permitorium," by only granting one deepwater drilling permit since the drilling ban was lifted last year.

The LEASE, or Lease Extension and Energy Security Act would give energy companies affected by the Gulf drilling moratorium an additional 12 months on their leases to make up for the lost time.

The bill has been referred to the Senate Energy and Natural Resources Committee, where it will draw opposition from environmental groups, but where it also has support from Landrieu, and Alaska Sen. Lisa Murkowski, the panel's ranking Republican. The bill's fate in the full Senate, though, is uncertain.

The senators said the bill will promote drilling, increase supply and ultimately bring down gasoline prices. According to AAA, a gallon of regular cost $3.52 Wednesday, up 40 cents from a month ago.

"We should not be so dependent on foreign oil when our country is so rich in resources," said Hutchison, who noted that when the ban was imposed, 33 leaseholders were conducting exploration drilling and thousands of leaseholders were in the earlier stages of exploration. While the moratorium was in place, all of the leaseholders continued to pay "rent."

All energy companies should not be penalized for "one bad actor," Landrieu said, referring to BP.

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