The Wall Street Journal (subscription):
The Gulf of Mexico Energy Security Act, crafted by New Mexico’s Pete Domenici, would open 8.3 million acres of the Outer Continental Shelf to oil and natural gas drilling. The bill doesn’t go nearly as far as we or many in the House would like, but it’s the best opportunity for new U.S. energy exploration in years.
While this Gulf acreage is known to hold oil reserves, the real significance is its bonanza of natural gas. Unlike the global oil market, most natural gas is produced regionally. Short supplies and high prices are punishing American industry, causing plant closures and job flight overseas. It is one of the larger economic messes in recent history, yet the political class barely mentions it — perhaps because the politicians have done more than anyone to cause it…
Gulf Coast Democrats are supporting this Senate bill, largely because it offers their states a cut of the royalties. The House has passed a much stronger bill, and in a better world would prevail. But with coastal, anti-drilling Democrats set to run Congress next year, now is the time for the House to swallow its pride, pass the Senate version without amendment to avoid a conference, and send it to President Bush.
The 8.3 million acres to be opened in the Senate bill would conservatively yield 5.8 trillion cubic feet of natural gas — a significant amount under any measure. Moreover, drilling in the Gulf has typically yielded three to five times more oil and gas than originally estimated. With any luck, the money that would start flowing to the Gulf states under revenue-sharing with the feds might also encourage other states to demand their own coastal exploration.
That should continue to be the long-term policy goal, as the outer shelf is estimated to hold an extraordinary 420 trillion cubic feet of natural gas, enough to keep the U.S. in affordable energy for decades. It’s a disgrace that Congress has locked up that supply and driven high-paying jobs overseas. Passing this drilling bill would make a lame-duck Congress a little less lame.
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