June 9, 2009 / 4:30 PM / 11 years ago

Senate panel oks drilling near Florida coast

WASHINGTON (Reuters) - The U.S. Senate Energy and Natural Resources Committee adopted an amendment to an energy bill that would allow drilling within 45 miles of Florida’s Gulf coast.

Workers drill for oil at an oil derrick in Los Angeles October 24, 2006. REUTERS/Lucy Nicholson

Florida now bans oil and gas drilling within 125 miles of its coasts in the Gulf of Mexico with the aim of protecting its tourism from pollution and ruining views from its beaches.

The new language offered by Senator Byron Dorgan passed by a 13-10 vote and would also open the Destin Dome area 24 miles south of Pensacola to drilling.

The American Petroleum Institute estimates the Destin Dome area has at least 2 trillion cubic feet of natural gas, enough to heat 2 million homes for 15 years.

The agency said the entire area in the eastern portion of the Gulf of Mexico that would be opened to drilling under this legislation could contain 3.7 billion barrels of oil and 21.5 tcf of natural gas.

The Senate panel also approved an amendment that clarifies that federal agencies are not barred from purchasing fuels developed from Canadian oil sands. The 2007 energy bill included a measure that blocked the federal government from buying alternative fuels with greenhouse gas emissions higher than conventional sources. It was aimed at liquid fuel derived from coal, but unintentionally affected oil sands.

Another measure adopted by the panel would require the 50 biggest traders of oil contracts to report any oil reserves they are storing offshore in tankers.

Senator Bernie Sanders, an independent from Vermont, offered the amendment. He said his amendment is aimed at preventing traders from distorting supply records and artificially driving up prices.

The committee is expected to approve the entire energy package later in the week. Senate Majority Leader Harry Reid said earlier this year that he wanted to combine the energy bill with legislation addressing climate change. Committee Chairman Jeff Bingaman said he would support whatever decision Reid makes on how to move the bill through the chamber.

But the bill may face a rocky road on the Senate floor as both Democrats and Republicans on the committee had objections to certain proposals.

Democratic Senator Mary Landrieu made an impassioned plea for revenue sharing for states, offering a second degree amendment.

Her proposal, which was defeated, would have given 37.5 percent of the revenues the government receives from oil and gas leases to coastal states, specifically Alabama, Florida, Louisiana, Mississippi and Texas.

Florida Democratic Senator Bill Nelson, though not a member of the committee, said the amendment would cut into the U.S. military’s largest testing and training area in the world.

“We will have a bunch of senators filibuster this if we have to protect the interest of the U.S. military,” he told reporters.

The panel voted down an amendment that would have allowed energy companies to tap oil in Alaska’s Arctic Natural Wildlife Refuge through directional drilling based outside the refuge’s boundaries, going under the reserve at an angle.

Additional reporting by Ayesha Rascoe; Editing by Marguerita Choy

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