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House set to advance offshore drilling ban in $31bn bill

9th September 2021

By: Bloomberg

  

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Congressional Democrats are poised to advance sweeping legislation to combat climate change that would, if the Senate goes along, block drilling in most US offshore waters and invest tens of billions of dollars in resilience measures.

The bill, set to be approved by the House Natural Resources Committee on Thursday, would also slap new fees on oil and mining companies and ban drilling in the Arctic National Wildlife Refuge.

The $31.7-billion measure, which calls for spending on drought relief, conservation and other programs, is designated to be part of a broader multi-trillion-dollar social reform and climate change measure in the House.

“We have a once-in-a-generation opportunity to advance a bold, ambitious investment in the people of the United States,” said committee chairman Raul Grijalva, a Democrat from Arizona. The legislation “will confront the damage being done by climate change, put our country on a more sustainable and equitable economic and environmental path, and create millions of jobs.”

Committee Republicans don’t share that view. Over the course of an initial nine-hour meeting to amend the bill last week, Republicans took turns lambasting it as a “delusional” package of Democratic “pet projects” and “green pork.”

The Democrats’ package is “partisan government overreach” that will “hamstring the economy, cripple domestic energy production and make the US dependent on foreign adversaries,”said Bruce Westerman of Arkansas, the panel’s top Republican.

A major piece of the legislation is the plan to restrict drilling and mining on federal land while boosting costs for the companies that do it. Jenny Rowland-Shea, deputy director for public lands at the Center for American Progress, says that would ensure government-managed lands are part of the solution to climate change.

“We want our public lands to be absorbing carbon -- not responsible for releasing it,” Rowland-Shea said.

The legislation would bar the sale of new drilling rights in Pacific and Atlantic waters as well as the eastern Gulf of Mexico, though central and western Gulf tracts could still be leased.

It also would reverse a mandate to sell drilling rights in the Arctic National Wildlife Refuge’s coastal plain and void nine leases issued in that northeast Alaska region earlier this year. Congress previously required two auctions of refuge leases by Dec. 22, 2024 to help pay for the 2017 tax cuts, based on predictions that oil leasing and development would yield more than $2 billion in revenues over a decade. The first auction netted less than $20 million.

The bill also would:

  • block the Resolution Copper mining project in Arizona by repealing a 2014 measure that authorised the transfer of roughly 2 400 acres of land for the joint venture involving Rio Tinto and BHP Group
  • rule out new uranium mining claims on more than one-million acres around the Grand Canyon
  • impose fees on mining on federal land, including royalties of as much as 8% and a new seven-cent-per-ton fee on displaced material
  • increase rental rates for onshore oil and gas leases, shorten the duration of them, impose a new $4-per-acre “conservation of resources fee” on the tracts, require companies to pay a royalty on vented or flared methane and boost overall royalty rates from 12.5% to 20%
  • create annual fees of up to $10 000 per mile on offshore pipelines -- including the Gulf of Mexico’s existing 8 600-mile network of them
  • spend $25-million each to conserve endangered and threatened butterflies, desert fish and freshwater mussels
  • dedicate at least $1.7-billion to establish a Civilian Climate Corps that would put Americans to work building clean energy infrastructure, capping inactive wells and conserving land.

Edited by Bloomberg

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