Robbing the Feds

LAST MONTH the House voted to lift the moratorium on offshore oil and gas drilling that has held for 25 years in most U.S. coastal waters. The bill’s central thrust was right — offshore drilling can be done safely — but it contained several flaws, not least excessive generosity to coastal states, which would pocket an estimated $69 billion over 15 years at the expense of the federal budget. Now the Senate leadership may vote on a bill that bows to coastal states again. The Bush administration and leaders in both chambers need to stand up for federal interests.

The Senate bill is narrower than the House one. Rather than lift the drilling moratorium in all U.S. coastal waters, the bill restricts drilling to 8 million acres in the eastern Gulf of Mexico. Because the moratorium was scheduled to expire in part of this area anyway, the incremental effect of the Senate plan would be to open up only 0.4 percent of the natural gas reserves and 1.5 percent of the oil reserves that are thought to exist in the Outer Continental Shelf. For this modest concession, the coastal states that traditionally resist offshore drilling would be handsomely rewarded.

For Alabama, Mississippi, Louisiana and Texas, the reward would be financial. These states pocket as little as 2 percent of the royalties from the offshore drilling that’s already allowed in the western gulf. Under the Senate plan, the states’ share of the royalties from new drilling leases would rise to 37.5 percent.

For Florida, meanwhile, the reward would take the form of a statutory ban on drilling anywhere near its coast. Whereas the House bill would ban drilling within 50 miles of the shore and allow states to extend that to 100 miles, the Senate would allow no drilling within 125 miles of Florida’s shore, and some parts of the state would get a buffer zone of more than 200 miles. Given that offshore drilling may pose smaller environmental risks to Florida’s coast than the alternative of bringing oil in by tanker, this protection is excessive.

Washington Post