House passes offshore drilling bill - Trade Only Today

House passes offshore drilling bill

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Reversing a decades-old ban on offshore drilling, an energy bill approved last night by the U.S. House of Representatives would allow drilling as close as 50 miles from the Atlantic and Pacific coasts.

“I think this is a great step forward to reducing our reliance on foreign oil and will be a significant psychological boost to the American public,” Thom Dammrich, president of the National Marine Manufacturers Association, told Soundings Trade Only this morning.

The marine industry has long favored lifting the offshore drilling ban to help lower gas prices and ensure a steadier supply of domestic oil.

The legislation also promotes investments in renewable energy and energy efficiency, paid for by eliminating tax exemptions for oil companies and increasing their royalty payments, and it authorizes more funding for heating assistance for low-income people, according to a report in today’s Boston Globe.

A last-minute provision added at the insistence of Massachusetts representatives would prohibit oil and gas drilling around Georges Bank, saving New England’s premier commercial fishing grounds from potential harm, the newspaper reports.

The bill still bans drilling in the eastern part of the Gulf of Mexico, according to the Associated Press.

The House voted 236-189 for the legislation.

In related news, a number of offshore oil and gas rigs in the Gulf of Mexico were destroyed by Hurricane Ike. As of Monday, 28 of the 3,800 offshore platforms were reported destroyed, and several others were significantly damaged, according to Mineral Management Service.

Initial estimates are that the destroyed rigs produced a total of 11,000 barrels of oil a day and 82 million cubic feet of gas a day.

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