05-06-07 by dugan
Until this weekend, I was sure the Senate, including California’s senior Senator, would cave in to the oil industry and weaken, if not kill, House legislation to fix botched federal contracts that exempted Big Oil from about $10 billion in oil-drilling royalties in the Gulf of Mexico. But the gasoline price records popping across the nation, and voters’ anger, may now, according to Bloomberg, force the Senate to pass the House measure without without doing the industry big favors in return.
California Sen. Dianne Feinstein seems to be backing away from a deal that would have particularly benefited San Ramon-based Chevron.
The proposal would have allowed oil companies, in return for renegotiating their flawed leases, to extend the leases without meeting deadlines to actually drill for oil. Such undeveloped leases, of which Chevron apparently owns more than others, give the oil companies "money in the ground," while preventing anyone else from drilling.
Now she’s apparently returning to the tougher House version.
Of course, the royalty legislation would be hardly a ding on Big Oil’s continuing march to record profits. And what Congress might actually take away, the White House giveth back, with last week’s announcement that large new drilling tracts will be opened in the Gulf, and off the Virginia coast.
As an angry protest issued Friday by New Jersey lawmakers points out, the Virginia leases could put at risk of oil spills a big swath of the East Coast north of Virginia–in return for as little as 17 days’ worth of U.S. oil consumption. It’s even worse tradeoff than drilling in the Alaska wilderness, and it rightly has Californians gearing up for a new fight with the feds over coastal drilling.