As gasoline prices edge up to a nationwide average of $4, there’s been lots of talk going on in Washington about giving American consumers relief by increasing domestic energy production of oil and gas. Unfortunately, it seems that Democrats and Republicans can’t come to a consensus on just how to do it.
The latest effort was a U.S. Senate bill that would have sped up the issuance of offshore drilling permits and expanded drilling to areas offshore Virginia and Alaska. The bill (S 953), “The Offshore Production and Safety Act of 2011,” sponsored by Senator Mitch McConnell (R-Ky.), met resounding defeat in the Senate. The bill only attracted 42 out of the 60 votes needed for passage.
In prepared remarks, Senator McConnell (shown in thumbnail photo), said the idea behind the bill was to “help reduce the price of gas at the pump.”
He said, “By unlocking our own domestic resources, and speeding up the permitting process, our plan would actually do something to increase supply, putting downward pressure on price” and reduce dependence on foreign sources of oil.
The Senator said the plan directs the Secretary of the Interior to conduct previously scheduled offshore lease sales in the Western and Central Gulf of Mexico, Virginia, and Alaska. In addition, the plan would extend lease terms by one year for Gulf leases that were suspended under the Deepwater Horizon Moratorium.
“After the devastating oil spill we had last year in the Gulf,” said Senator McConnell, “improving safety is one of our highest priorities. That’s why our plan amends the Outer Continental Shelf Lands Act to require all lessees to develop spill response and containment plans, establishes a public/private task force on oil spill response and mitigation, and orders a study on federal response to oil spills by the Comptroller General to examine capabilities and legal authorities related to spill prevention and response to clarify appropriate federal roles.”
In addition, the Senator explained, the bill also puts time limits on the review of and decision on drilling permits, providing for 30 days of application review with two opportunities for the Interior Department to extend the time period. Beyond that, it provides for default approval if Interior doesn’t reject the application within 60 days.
“And it directs the Interior Department to provide rationale for rejection of permits,” he added.
The American Petroleum Institute (API), the lobbying arm for the oil and gas industry, said the Offshore Production and Safety Act had pushed the country’s energy debate in a more constructive direction.
"While the motion to proceed failed, we’re pleased to see the Senate finally consider a bill that turns the energy debate in a more positive direction by recognizing the benefits of greater domestic energy production,” said API’s Executive Vice President Marty Durbin.
A recently defeated Democratic-sponsored bill had tried to repeal Outer Continental Shelf deepwater oil and gas royalty relief for oil majors.
Durbin said some senators that opposed the Offshore Production and Safety bill “did so out of concern that it didn’t go far enough in encouraging more domestic energy development, which could produce as many as one million jobs and trillions in additional government revenues. We hope the discussion leads to realistic policies for a stronger and more secure energy future. The reality is our nation will use substantial amounts of oil and natural gas in the years and decades ahead – even as we embrace greater use of renewable energy – and we can produce more of these resources safely at home, generating jobs, more revenue for our government, and greater energy security.”
May 19, 2011