CONSISTENTLY DELIVERS

May 11, 2011

Support for Offshore Development Continues as Gas Prices Soar

 

Hastings Legislation Passes House with Bipartisan Support
 
Last Thursday, the House of Representatives passed the Restarting American Offshore Leasing Now Act (H.R. 1230) by a bipartisan vote of 266 to 149. The legislation was introduced by U.S. Representative Doc Hastings (Washington), Chairman of the Natural Resources Committee. Those voting in favor of the legislation included 33 Democrats from across the nation. 
 
H.R. 1230 would require the Secretary of the Interior to conduct oil and natural gas lease sales in the Gulf of Mexico and off the coast of Virginia within one year of enactment of the bill. 
 
The legislation affects the lease sales that were established in the federal government’s current five-year plan for offshore leasing and energy production, but cancelled or delayed by the Obama Administration. The affected lease sales are: a lease sale (#220) off the Virginia coast in 2011, two Gulf of Mexico lease sales (#216 and #218) in 2011, and an additional lease sale in the Gulf of Mexico (#222) in 2012. 
 
H.R. 1230 does not address royalty payments resulting from these lease sales. However in 2006, the Gulf of Mexico Energy Security Act (GOMESA) provided for leasing revenues to be shared with Gulf producing states and the Land & Water Conservation Fund for coastal restoration projects. While there is no royalty system in place for lease sales off the Virginia coast, Congressman Goodlatte’s Virginia Outer Continental Shelf Energy Production Act of 2011 (H.R. 1372) would create such a system. 
 
Additionally, Congressman Hastings introduced two other bills in April: the Putting the Gulf Back to Work Act (H.R. 1229) and Reversing President Obama’s Offshore Moratorium Act (H.R. 1231). H.R. 1229 would end the Obama Administration’s de facto moratorium in the Gulf of Mexico and H.R. 1231 would lift the Administration’s ban on new offshore drilling. 
 
 
 
Congressman Hastings’ Floor Remarks on H.R. 1230
 
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Governor McDonnell Offers Support of Congressional Legislation
 
Last Thursday, Virginia’s Governor McDonnell held a press event at a Richmond-area gas station to discuss rising gas prices and the need for more domestic energy production—including offshore exploration and production off the coast of Virginia. Specifically, Governor McDonnell urged support of H.R. 1230, passed Friday by the House of Representatives, and H.R. 1372, introduced by Congressman Goodlatte (Virginia).  
 
Small business owners, including Delegate Jimmie Massie (R- Henrico), and representatives of the energy industry gathered to encourage Governor McDonnell’s efforts in supporting the Congressional legislation to bring environmentally responsible offshore development and production to the coast of Virginia. 
 
Governor McDonnell stated, "America has an energy policy problem.  Today, Virginia businesses and families are paying, on average, $3.88 per gallon for gasoline.  That's up $1.00 from a year ago. The Energy Information Administration estimates that gasoline will cost the average U.S. household $1,210 more this year than in 2009. That is money that could be spent by families on education, groceries and vacations. Instead it is money being spent at the pump.  The pain at the pump is the result of many factors, one of which is the result of our ongoing dependence on foreign sources of oil. That is why I strongly support increasing domestic energy production from every possible source, including wind, solar, biomass, nuclear, oil and natural gas. A key part of that effort should be the environmentally responsible development and production of oil and natural gas off of Virginia's shores." 
 
 
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North Carolina Senate Supports Offshore Drilling
 
On Tuesday, the North Carolina Senate voted 38-12 to support the Energy Jobs Act (SB 709) to help the state receive royalties from offshore exploration and development. The legislation urges Governor Beverly Perdue to form a pact with Virginia and South Carolina for collection of the royalties. The legislation will now move to the North Carolina House of Representatives before the General Assembly adjourns for the year on August 5th
 
Additionally, SB 709 requires that North Carolina environmental regulators report in 2012 on the commercial potential of shale deposits in central North Carolina. 
 
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Today’s Average Prices
National: $3.96 per gallon
North Carolina: $3.86 per gallon
Virginia: $3.87 per gallon
NYMEX: $101.60 crude future
 
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