Smaller Gulf Site OKd for Drilling

The Bush administration announced plans Monday to move ahead with a scaled-down plan for oil and gas drilling in the eastern Gulf of Mexico, heading off a political showdown between the president and his brother, Florida Gov. Jeb Bush, but failing to end the political storm.

The administration’s Solomon-like plan to permit drilling within a 1.5-million-acre expanse, one-fourth the size of the original lease proposal and more than 100 miles off the Florida coast, failed to satisfy either the oil and gas industry or environmental groups. Nor did it pass muster with Sen. Bill Nelson (D-Fla.), who vowed to continue to fight the proposed lease sale in the Senate.

Still, the proposal allows President Bush to demonstrate some progress with an important element of his administration’s embattled national energy plan, which has met with unexpected resistance even from members of his own party.

Just a week and a half ago, the GOP-led House voted to ban drilling in the Gulf tract, which encompassed nearly 6 million acres in its original form.

An aide to Rep. Joe Scarborough (R-Fla.) said Monday the drilling ban is likely to be removed during a House-Senate conference, “since we got what we wanted” with the scaled-down lease sale plan.

With lawmakers casting recent votes to prohibit drilling in other sensitive areas too, the Gulf compromise worked out by the administration will allow the president to declare a modicum of victory on energy policy.

The Gulf site, even in its reduced form, still holds an estimated 1.25 trillion cubic feet of natural gas and 185 million barrels of oil, according to federal officials.

Oil industry officials, though disappointed about forfeiting part of the potential reservoir, said the smaller lease was nonetheless significant in scale and could yield enough natural gas to serve 1 million homes for 15 years. The reduced reserve contains enough oil to fuel 1 million vehicles for six years, according to federal estimates.

The lease sale, the first in the eastern Gulf in more than a decade, will proceed in December unless thwarted by Congress. Lease Sale 181, as it is known, is excluded from a federal moratorium on new offshore oil leases put in place by former President Bush and extended by President Clinton until 2012.

Most drilling in the Gulf now occurs off the coasts of Texas, Louisiana and Mississippi.

In announcing the new lease area, Interior Secretary Gale A. Norton said her decision represents “a very reasonable compromise between those who support further development of the [outer continental shelf] . . . to meet our growing energy demands and the citizens of Florida who oppose drilling in the waters off their coastline.”

Norton said the decision would yield at least $136 million in lease sale proceeds for the U.S. Treasury.

A White House spokesman said that while the president and his brother have discussed the divisive issue, Norton made the decision.

Norton pledged that the lease sale would include “a number of measures to protect marine and coastal resources and ensure prompt response in the unlikely event of a spill.”

White House spokesman Dan Bartlett called the compromise a “strong indicator that the president is taking a balanced approach” to energy and environmental policy.

Noting that the 6-million-acre lease sale was advanced by the Clinton administration, Bartlett added: “We are protecting more waters off the shores of Florida than they ever agreed to. We think it says this president is committed, as he said during the campaign, to listen to local concerns. We knew we weren’t going to please everybody on sensitive issues like this.”

The lease sale presented Bush with a difficult personal and political dilemma: Oil and gas interests that donated heavily to his campaign pushed to open the 6 million acres to exploration. But the plan was opposed by Bush’s brother, environmentalists and a bipartisan group of lawmakers from Florida, a state that is crucial to the president’s possible reelection.

On Monday, Gov. Bush praised the compromise.

“I am proud to say Floridians have spoken loud and clear, and their voices have been heard by President Bush,” the governor said in a statement.

The governor acknowledged the intraparty tensions created by the dispute, noting the administration’s revised plan would allow drilling in a “remote portion” of the Gulf, “thereby diminishing the potential for retaliatory actions by neighboring oil- and gas-producing states against Florida.”

Last week, members of the Alabama delegation who favor drilling in the Gulf struck back at Florida by winning House approval for a measure that would prevent work on a pipeline designed to deliver natural gas to Florida.

Calling increased energy production an issue of economic stability and national security, Sen. Richard C. Shelby (R-Ala.) said in a statement: “While I would have liked to have seen the entire Lease Sale 181 area offered for lease, I believe the administration’s proposal is a step in the right direction.”

But Nelson suggested that the compromise may not win favor in his home state. “Wait till Floridians find out about this,” the senator said. “They’re going to realize that for the first time, the eastern Gulf is being invaded with oil drilling. . . . While those who support this move will claim that it’s a great victory, that it took away 4 million acres, the fact is that they’re going to drill on 1 1/2 million acres, and that still poses substantial threat to Florida’s beaches.”

Nelson vowed to take any steps necessary to prevent drilling in the eastern Gulf, including seeking to block Senate confirmation of a deputy Interior secretary nominated by Bush.

“You better watch out for the coastline of California,” he added.

But a White House spokesman noted that the president said during the campaign that he would honor the existing ban on new leases off the California coast.

Carl Pope, the Sierra Club’s executive director, called the president’s decision a “step in the right direction,” but declined to embrace the compromise. “This still leaves the coast of Florida at enormous risk. This is still a dagger pointed at the heart of Florida’s tourism industry, and the governor should be ashamed of himself for trying to call this a victory.”

Pope offered this explanation of the outcome: “Jeb blinked.”

The Bush administration’s action suggests that “they’re going to modify things in ways that don’t make any real difference,” Pope said.

Although disappointed about the reduced drilling area, Rhone Resch, director of energy and environment for the Natural Gas Supply Assn., said the compromise “starts to show that the administration is willing to balance the concerns of local communities while also opening up access to natural gas resources that are very much needed.”