NCGA Urges Swift Passage of Bipartisan Oil and Gas Legislation (7-21-06)

Concerned with high natural gas prices and the impacts of price and decreased supplies on agriculture producers, National Corn Growers Association (NCGA) President Gerald Tumbleson urged swift passage of the Gulf of Mexico Energy Security Act, bipartisan legislation regarding oil and gas leasing introduced last night in the Senate.

“This is a crucial step in increasing the supply of natural gas,” said Tumbleson. “We are urging the Senate to pass this legislation before they leave for August recess. Corn growers support increased exploration, development and production of oil and natural gas in the Outer Continental Shelf (OCS). Our nation’s economic and energy security will be seriously impacted if legislation like this is not passed.”

NCGA joined 105 other members of the Agriculture Energy Alliance (AEA) in advocating for quick passage of the legislation. “Our immediate goal is to ensure that every effort is made to support passage of this bill,” the AEA said.

The Gulf of Mexico Energy Security Act (S.3711), the Senate companion bill to H.R. 4761, directs new oil and gas leasing in 8.3 million acres of the Gulf of Mexico. The legislation directs the Department of the Interior to begin oil and gas leasing in designated parts of Lease Sale 181 no later than one year after the bill becomes law and directs leasing in 181 South as soon as practicable. It places a 16-year moratorium on oil and gas activity near the Florida coast and excludes certain parts of 181 and 181 South that are either used for military training activity or are near the Florida coast.
 
 The Gulf-producing states will receive 37.5 percent of the revenue from oil and gas development in the new areas with an additional 12.5 percent going to the Land and Water Conservation Fund for the state assistance program. The remaining 50 percent will go to federal coffers. After 2017, the Gulf-producing states will also receive 37.5 percent of revenues from new leases in areas of existing development adjacent to Lease Sale 181.

According to Sen. Pete Domenici (R-N.M.), this bill is the strongest energy-producing legislation filed in the Senate this year. According to the Department of the Interior, the 8.3 million acres being developed contain 1.26 billion barrels of recoverable oil and 5.8 trillion cubic feet of natural gas. The natural gas supply made available through this bill is enough to heat and cool nearly 6 million homes for 15 years.

Producers depend on significant amounts of natural gas for food processing, irrigation, crop drying, heating farm buildings and homes, and production of crop protection chemicals and nitrogen fertilizers.
To view the AEA press release on the bill, click here.