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Offshore drill ban gone, but Atlantic drilling still long way off

By Sean Mussenden | Media General News Service

Published: October 8, 2008

Washington, D.C. - Although Congress let a ban on offshore drilling expire at the end of last month, don't expect to see oil rigs along the North Carolina coast anytime soon.

Even without the ban, another federal law prevents oil companies from leasing Atlantic drilling sites from the government for at least two years. And after the leases are sold, it likely will take another five to 10 years before oil production begins.

"The good news, from our perspective, is there won't be rigs out there in a week," said Nat Mund, legislative director of the Washington office of the Southern Environmental Law Center, one of dozens of environmental groups that oppose offshore drilling.

"There's a multi-step process they have to go through - both the oil companies and the government - before drilling can begin," he said.

And long before that process ends, both industry and environmental groups say they expect the Democratic-controlled Congress to revisit the drilling ban decision. Early next year, Congress could reinstate the ban or, more likely, allow some drilling while restricting most oil production within sight of the shore.

During intense, pre-election debate over energy policy last month, Democratic leaders in the House dropped their longstanding opposition to offshore drilling.

They approved an energy package that would have allowed oil companies to drill for oil and natural gas on the Outer Continental Shelf more than 50 miles from the coast, as long as adjacent states approved.

That bill - and other similar drilling proposals - stalled in the Senate, after lawmakers said that intense pre-election partisanship made it impossible to reach a compromise.

For decades, several federal laws have banned oil drilling in the Atlantic.

In spending bills since 1981, Congress has prohibited the government from spending any money to lease offshore sites to oil companies - effectively banning the practice. And in 1990, President George H.W. Bush issued an executive order that more explicitly blocked Atlantic drilling, a move upheld by President Clinton.

This summer, President Bush overturned the executive ban passed by his father. And late last month, Congress passed a spending bill that, for the first time in decades, did not include the ban on spending money to lease offshore sites in the Atlantic.

Republicans have pushed to end the ban, suggesting that doing so would provide an immediate cure for high gas prices. But federal officials who oversee oil production say two roadblocks make that unlikely, at least in the near term.

Even with the congressional and executive bans gone, another federal rule prevents the government from leasing areas not included in a five-year leasing plan produced by the Minerals Management Service. That federal agency oversees oil leases.

The current five-year plan does not include sites off the coast of North Carolina. Though the agency is currently drafting a new plan that could open up waters off the state's coast, it will not be finished until mid-2010 at the earliest.

Another roadblock: Atlantic states still lack most of the necessary infrastructure to support oil production.

"The pipelines and receiving facilities on shore - none of which exist as this time - would need to be built," said Nicholas Pardi, a spokesman for the Minerals Management Service.

It typically takes eight years for an oil company to begin production after acquiring a lease, Pardi said.

"There is a significant amount of environmental study that needs to be done," before production can begin. "But there are so many variables involved, it's hard to say how long it would actually take."