Washington – The Senate was expected to vote today on whether to expand oil and gas drilling to 8.3 million acres of Gulf of Mexico waters off-limits to energy development for a quarter-century. The House has passed a broader bill dealing with offshore drilling.
Watching the developments closely are business owners such as Jay Bender, who runs a plastics plant in Brookings, S.D.
Natural-gas prices have soared, and his company is feeling the pain. He believes the answer is more production, including in the restricted coastal waters.
“We’re the only industrialized country that is not actively pursuing more natural-gas resources. It makes no sense to me,” Bender said.
Bender and hundreds of business owners, in letters to members of Congress, have urged an end to the freeze that has barred oil and gas drilling off 85 percent of the country’s coast.
Lobbying powerhouses such as the Washington-based National Association of Manufacturers, U.S. Chamber of Commerce and National Chemistry Council have led the drive.
For the first time in a decade, Bender says, he has been forced to raise the price of the plastic components his plant molds into parts for such things as electronic scoreboards, medical equipment and printer cartridges. The cost of the raw plastic pellets has doubled in the past two years because those pellets are made of natural gas and oil.
Heating the warehouses by gas, Bender says, “costs two or three times what it did three years ago.”
The natural-gas bill for chemical companies has jumped from $7.5 billion in 1999 to $30 billion last year, and some companies are expanding overseas where gas is cheaper, says Jack Gerard, president of the American Chemistry Council, the industry trade group.
Other energy-intensive business sectors including forest and paper, pesticide, aluminum and makers of carpets, bedding and furniture are being hit hard.
Senators planned to vote on whether to expand oil and gas development in the east-central Gulf, opening up 8.3 million acres for drilling.
Last month, the House approved an even broader measure that would lift the quarter-century drilling freeze in Pacific and Atlantic coastal waters, although states could prohibit drilling if they choose to do so.
“In a nutshell, this bill is good for the people who are burdened with high cost of natural gas, the high cost of oil. It is their property. We ought to develop it and do it now,” says Sen. Pete Domenici, R-N.M., the Senate bill’s main sponsor.
Many environmentalists – as well as senators from coastal states such as New Jersey, California and Florida – fear that the drilling will raise the risk of oil spills and threaten fragile ecosystems and tourism.
David Alberswerth of the Wilderness Society says the question people “should be asking is, Why is the oil and gas industry sitting on large amounts of unproduced federal natural gas that they have leased already?”
The Senate bill is limited to an area of the central Gulf that is 125 to 300 miles off Florida’s coast.
