Senate panel oks drilling near Florida coast

By Jasmin Melvin

WASHINGTON (Reuters) - The U.S. Senate Energy and Natural Resources Committee adopted an amendment to an energy bill that would allow drilling within 45 miles of Florida's Gulf coast.

Florida now bans oil and gas drilling within 125 miles of its coasts in the Gulf of Mexico with the aim of protecting its tourism from pollution and ruining views from its beaches.

The new language offered by Senator Byron Dorgan passed by a 13-10 vote and would also open the Destin Dome area 24 miles south of Pensacola to drilling.

The American Petroleum Institute estimates the Destin Dome area has at least 2 trillion cubic feet of natural gas, enough to heat 2 million homes for 15 years.

The agency said the entire area in the eastern portion of the Gulf of Mexico that would be opened to drilling under this legislation could contain 3.7 billion barrels of oil and 21.5 tcf of natural gas.

The Senate panel also approved an amendment that clarifies that federal agencies are not barred from purchasing fuels developed from Canadian oil sands. The 2007 energy bill included a measure that blocked the federal government from buying alternative fuels with greenhouse gas emissions higher than conventional sources. It was aimed at liquid fuel derived from coal, but unintentionally affected oil sands.

Another measure adopted by the panel would require the 50 biggest traders of oil contracts to report any oil reserves they are storing offshore in tankers.

Senator Bernie Sanders, an independent from Vermont, offered the amendment. He said his amendment is aimed at preventing traders from distorting supply records and artificially driving up prices.