House OKs speed-up of Arctic oil/gas permitting

WASHINGTON Thu Jun 23, 2011 1:13am BST

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WASHINGTON (Reuters) - The House of Representatives passed legislation on Wednesday that would speed up approvals for drilling in the Arctic by removing regulatory hurdles that have stymied development of the area's vast oil and gas resources.

The Republican-controlled House voted 253 to 166 in favor of the bill, which would require the Environmental Protection Agency to approve or deny applications to drill on the outer continental shelf within six months.

"Current impediments have delayed development of the Beaufort and Chukchi sea for over five years," the bill's sponsor, Republican congressman Cory Gardner, said in a speech on the House floor.

"These are areas that have already been approved for drilling; the revenues for the leases have already been collected by the federal government," he said.

The bill, which faces a tougher road to passage in the Democrat-controlled Senate, would also eliminate the authority of EPA's Environmental Appeals Board to weigh in on the Arctic exploration permits.

That appeals board scuttled Royal Dutch Shell's plans to drill in the Beaufort Sea this year, when it revoked a key air permit.

The board's decision was the latest in a series of setbacks Shell has encountered since it began picking up significant offshore Alaska leases in 2005.

Shell has recently submitted two new exploration plans to begin drilling in the Beaufort and Chukchi seas in 2012 and 2013.

Lawmakers who supported the legislation say Shell's challenges in the Arctic show the need for reform. The bill is also part of a broader effort by Republicans to speed up the permitting process since last year's Gulf oil spill cast a pall over offshore energy exploration.

The White House came out against the House bill on Tuesday, saying it would curtail the authority of the EPA to ensure that oil production on the outer continental shelf "proceeds safely, responsibly, and with opportunities for efficient stakeholder input."

Green groups also strongly opposed the legislation.

"This bill is nothing more than the latest battle in an all-out war on the Environmental Protection Agency, with America's Arctic Ocean and the people who have depended on its waters for thousands of years, as the casualties," said Leah Donahey of the Alaska Wilderness League.

Alaskan Senator Lisa Murkowski, the top Republican on the Senate Energy and Natural Resources Committee, is working to gain support for similar legislation in that chamber, however.

"We have companies that have spent more than five years and billions of dollars attempting to conduct offshore exploration and production in Alaska, but have been unable to secure the necessary permits from EPA," Murkowski said in a statement about her bill.

"It's clear that this process is not just overly costly and time-consuming but simply does not work," she added.

(Editing by Sofina Mirza-Reid and Steve Orlofsky)

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