tp://www.businessweek.com/news/2011-05-12/house-passes-bill-to-add-u-s-areas-for-offshore-drilling.html
May 12, 2011,4:01 PM EDT
By Jim Snyder
(Updates with comment from Young in fourth paragraph.)
May 12 (Bloomberg) — The Republican-controlled U.S. House passed legislation to open areas to oil drilling along the Atlantic, Southern California and Alaska coasts, the third bill approved to boost output as gasoline prices reach $4 a gallon.
The legislation was approved by a 243-179 vote, with 21 Democrats in favor, hours after oil company executives appeared at a Senate hearing to defend $21 billion in tax breaks that Democrats want to repeal to reduce the federal deficit.
Republicans have focused on expanding offshore production to lower gas prices. The House bill would require the U.S. to increase production goals to 3 million barrels of oil a day by 2027, and open areas now off-limits to oil and gas companies.
“Even in the face of rising gasoline prices, the president wants to drill nowhere new,” Representative Don Young, an Alaskan Republican, said when debate on the measure began yesterday. “This bill says:’Let’s move forward with leasing and drilling in those areas where we know America has real and significant resources.'”
Congress let a drilling ban along much of the outer continental shelf expire in 2008 after gas prices exceeded $4 a gallon. President Barack Obama said in March 2010 that he supported expanding offshore drilling. He withdrew the plan after an explosion 20 days later aboard the Deepwater Horizon rig in the Gulf of Mexico killed 11 workers and triggered the BP Plc spill, the worst in U.S. waters.
Safety Reforms
Representative Edward Markey, a Massachusetts Democrat, said Congress should pass safety reforms in response to the spill. Residents in states where offshore drilling would be allowed “don’t want oil coming in the way it did in the Gulf of Mexico,” he said yesterday.
The House has now passed three measures aimed at expanding U.S. oil and gas production. Lawmakers last week passed a bill requiring lease sales in parts of the Gulf of Mexico and off of Virginia’s coastline. Yesterday, it passed legislation forcing the Interior Department to rule on drilling permits within 60 days. The permit would be approved if the deadline expired without action.
The administration said it opposes all three measures, without issuing a veto threat. The bills must pass the Democrat- controlled Senate to become law, and the chamber isn’t considering similar measures.
Expanding drilling won’t affect gas prices, which are set by a global market, Democrats said.
Senate Hearing
In the Senate today, executives from Exxon Mobil Corp., Royal DutchShell Plc, Chevron Corp., ConocoPhillips and BP said production costs may rise and gasoline prices increase if Democrats succeed in stripping the tax breaks, including a $13 billion credit for manufacturing.
The plan is “counterproductive,” Exxon’s Chief Executive Officer Rex W. Tillerson told the Senate Finance Committee at the hearing. More money could be generated through royalty payments to the government under new leases than in repealing the breaks, the executives said.
Senator Jay Rockefeller, a West Virginia Democrat, accused the officials of being “out of touch” in defending what Democrats say are unnecessary breaks given industry profits.
Exxon reported net income of $10.7 million during the first three months of the year.
The average gasoline price was $3.984 yesterday, up from $2.896 a year earlier, according to AAA’s daily fuel report.
–Editors: Steve Geimann, Larry Liebert
To contact the reporters on this story: Jim Snyder in Washington atjsnyder24@bloomberg.net.
To contact the editor responsible for this story: Larry Liebert atlliebert@bloomberg.net.
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http://www.myfoxchicago.com/dpps/news/house-votes-to-expand-offshore-drilling-dpgonc-20110512-ch_13176209
Special thanks to Richard Charter