February 16, 2006

Official says drilling off Fla. has little risk

By Tom Doggett

WASHINGTON (Reuters) - Energy companies can use new
drilling technology to safely explore for oil and natural gas
in a disputed area of Florida's coast with little risk of an
accident or a spill, a top U.S. Interior Department official
told Congress on Thursday.

The Interior Department has proposed allowing drilling in
an area about 100 miles off Florida's western coast in the Gulf
of Mexico. There is similar Senate legislation to permit oil
and gas exploration.

The area, know as Lease Sale 181, was shut to drilling
after Florida officials complained that an oil spill or other
exploration accident could foul beaches and hurt the state's
multi-billion-dollar tourism industry.

Johnnie Burton, Director of the Interior Department's
Minerals Management Service that oversees offshore drilling,
told a Senate hearing on Thursday that drilling technology
"makes it possible to control the risks" for retrieving the
area's oil and gas supplies.

Burton told the Senate Energy Committee that energy
companies have a good safety record of drilling in the Gulf of
Mexico. She noted there were no major oil spills last year even
though hurricanes Katrina and Rita damaged many production
platforms and underwater pipelines.

Republican Sen. Pete Domenici, who chairs the energy panel
and has introduced legislation to allow limited drilling in the
181 area, said the oil and gas in the disputed waters "belong
to the United States of America" and the country needs the
supplies to help meet its energy demand.

Sen. Jeff Bingaman, the top Democrat on the committee, is a
co-sponsor of the bill.

The bottom part of the 181 area, where the legislation
would allow drilling, holds an estimated 6 trillion cubic feet
of gas.

The eastern part of that area, used by the military for
training, holds 1.2 trillion cubic feet of gas and would be
under the Pentagon's control. No drilling would be allowed
without the okay of the Defense Department.

The rest of the bottom area holds 4.8 trillion cubic feet
of gas and would automatically be opened to energy companies,
under the legislation.

Domenici said the additional oil and gas would help control
energy prices that crimp economic growth. He pointed out that
new Federal Reserve Chairman Ben Bernanke told Congress on
Wednesday that rising energy costs threaten the U.S. economy.

The Senate legislation, if passed and signed into law,
would require the department to begin leasing tracts in the 181
area within a year. Burton said the department's proposal to
drill in the area would not be finalized for 18 months.

Republican Sen. Mel Martinez of Florida, a member of the
energy committee, said he would oppose Domenici's legislation
and the Interior Department plan to open 181 area to drilling.
Most of Florida's large congressional delegation is expected to
follow suit.