Senate panel OKs Florida offshore drilling plan

By Chris Baltimore

WASHINGTON (Reuters) – The U.S. Senate Energy Committee
voted on Wednesday to open nearly 3 million acres of federal
waters in the eastern Gulf of Mexico to energy exploration,
bringing the contentious issue closer to reality.

The proposal to open to development 2.9 million acres in
the Outer Continental Shelf 100 miles off Florida passed 16-5,
with one senator voting “present.”

The bill backed by Republican Pete Domenici, chairman of
the panel, and Sen. Jeff Bingaman, its top Democrat, aims to
expand access to natural gas in the area often referred to as
“Lease Sale 181.”

“This is the most important piece of energy legislation we
have taken up since passing the energy bill last year,”
Domenici said in a statement, saying supplies from the area
“will have a profound effect on gas supply and price.”

Sen. Bill Nelson, Florida Democrat, threatened to
filibuster the bill — or talk it to death — when it comes to
a full Senate vote.

“It’s our intent to filibuster the bill, or do whatever it
takes to kill it,” Nelson said.

Republicans say U.S. consumers need the energy to head off
a supply crunch, and that the area’s 7.2 trillion cubic feet of
natural gas could heat nearly 6 million homes for 15 years.

The panel’s two Florida lawmakers, who have fought to keep
the area near that state’s panhandle off-limits to drilling,
also voted against Domenici’s plan. They favor a plan that wold
keep drilling at least 150 miles off Florida’s coast.

The area was shut to drilling after Florida officials
complained that an oil spill or other exploration accident
could foul beaches and hurt the state’s multibillion-dollar
tourism industry.

Sen. Mary Landrieu, a pro-drilling Democrat from Louisiana,
voted against the proposal because it does not share revenues
for drilling on Lease 181 — estimated at up to $11 billion
over its lifetime — with coastal states hit by hurricanes Rita
and Katrina.

Mississippi’s two Republican senators, Trent Lott and Thad
Cochran, introduced legislation on Wednesday aimed at
redirecting federal dollars from 181 area drilling to states.

Under the bill, to be offered as an amendment or substitute
to Domenici’s, 50 percent of federal revenues from Lease 181
would go to Gulf Coast states, excluding Florida. Of those
funds, the state that hosts drilling would get 65 percent and
coastal counties would get 35 percent.

Up to $1.5 billion could go to Mississippi over the
lifetime of the 181 leases, versus $125 million the state is
expected to get from last year’s energy bill.

Separately, the Senate late on Tuesday added $1 billion to
low-income energy assistance programs.