IMAGE: OIL RIGS
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The Gulf of Mexico is peppered with oil rigs like these.
msnbc.com news services
updated 2/9/2006 11:17:16 AM ET 2006-02-09T16:17:16

The oil industry is welcoming, while environmentalists and some Florida lawmakers are opposing, a new Bush administration proposal to open a large area of the eastern Gulf of Mexico to oil and gas leasing.

The Interior Department’s leasing proposal, released Wednesday, would encompass more than two-thirds of an area known as Lease 181, while continuing to ban oil and gas development in waters within 100 miles of the Florida coast.

President Bush in 2001 assured Florida officials — including his brother, Gov. Jeb Bush — that the Lease 181 area would be protected at least through this year. The new proposal, expected to become final early next year, would cover the 2007-2012 leasing period.

Separately, the department expressed continued interest in possibly opening waters off Virginia to gas drilling. Congress would have to come up with an arrangement whereby the state would seek permission to develop the offshore area. It is now part of a broad freeze on coastal drilling.

The plan included possible drilling of Virginia so that action on lease sales could commence quickly if Congress and the state act, Interior officials said.

The Lease 181 area has a potential to provide more than 5 trillion cubic feet of natural gas — enough to heat 5 million homes for 15 years — as well as oil.

Both Fla. senators oppose
Florida’s strong opposition has stymied development for years.

The state’s two U.S. senators said Wednesday they would fight the proposal in Congress because while leases would be far from the Florida coast, there’s no protection against drilling edging closer to land in future years.

“It does not provide any sort of permanent protection for Florida,” said Sen. Mel Martinez, R-Fla., echoing similar concerns voiced by Sen. Bill Nelson, D-Fla.

Nelson accused the administration of “siding with two dozen oil and gas companies” that want access to the eastern Gulf, and he said the plan would lead to “the largest expansion of drilling off the Florida coast in our country’s history.”

Florida officials long have feared that any encroachment into the eastern Gulf of Mexico by oil and gas companies may lead to eventual drilling closer to the state’s shores. That, they argue, could cause potential environmental harm and threaten the state’s multibillion tourist industry.

Environmentalists oppose more drilling, and urge more conservation and development of alternatives to oil and gas.

Industry's view
Mike Linn, chairman of the Independent Petroleum Association of America, said Interior’s proposal was a step in the right direction but contended the government needed to open even more areas to drilling.

High-stakes, high-tech drilling“As consumer demand for oil and natural gas rises, the country must meet the supply challenges by securing reliable energy from America’s own reserves,” he said.

The draft proposal from the department’s Minerals Management Service outlines the government’s offshore oil and gas leasing plans for the next five years.

“With sharply higher energy prices buffeting both families and businesses, we want to be sure that we fully consider the environmentally sensitive development of the vast domestic oil and gas resources off our coasts,” Johnnie Burton, the agency’s director, said in a statement.

The Clinton administration had proposed developing the 6 million acre Lease 181 area. The area is not included in a drilling freeze that has put almost all the U.S. coastline outside the western Gulf off limits to energy development.

In 2001, Bush acted to keep most of the eastern Gulf area free from development, at least temporarily. He did open to drilling a small part of Lease 181 that is farthest away from Florida.

The plan announced Wednesday would permit drilling in the “bulge” area of the Lease 181 area, all of which lies at least 100 miles from Florida’s coast. An area known as the “stovepipe” because it juts northward close to the Florida Panhandle would remain off limits to oil and gas companies.

Martinez and Nelson recently introduced legislation that also would allow development of much of the Lease 181 area, but it would also contain additional restrictions, including assurances that future development would not encroach any closer to Florida’s shores.

The Sierra Club on Wednesday formally endorsed that approach.

“Instead of undermining protections that America’s coasts have long enjoyed, the Sierra Club is urging Congress and the administration to move more in the direction of Senators Nelson and Martinez,” Melinda Pierce, a Sierra Club offshore drilling specialist, said in a statement. “It’s time to shift the national debate on offshore drilling closer to securing permanent protection for America’s fragile coasts.”

Some senators for opening area
Meanwhile, several other senators have introduced a bill that would require Lease 181 development within a year, roughly along the lines being proposed by the Interior Department.

“You can’t even see it (the lease area) from the shore,” said Sen. Pete Domenici, R-N.M., a co-sponsor of that bill. “You’ll need binoculars.”

Domenici, chairman of the Senate Energy and Natural Resources Committee, promised quick hearings on the bill. Other co-sponsors include the committee’s ranking Democrat, Sen. Jeff Bingaman of New Mexico, and Sens. Byron Dorgan, D-N.D., and Jim Talent, R-Mo.

More than 85 percent of the waters around the lower 48 states currently are off limits to energy development.

Energy exploration is allowed off Texas, Louisiana, Mississippi, Alabama and parts of Alaska.

The drilling plan will be open for public comment for 60 days. Comments are being taken via this Web site: http://ocsconnect.mms.gov/pcs-public/.

The Associated Press and Reuters contributed to this report.

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