Senate Passes Gulf Oil Treaty Bill

Wednesday, October 16, 2013 @ 12:10 PM gHale

The U.S. Senate unanimously passed legislation to enact an international treaty Saturday that would govern oil drilling along the U.S.-Mexico border in the Gulf of Mexico.

The bill would implement the U.S.-Mexico pact that sets a framework for oil and gas development along the countries’ maritime boundary in the Gulf. The hydrocarbon agreement, first signed in February 2012 and ratified by Mexico two months later, would encourage commercial unitization agreements where oil and gas on both sides of the boundary end up divided.

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While the bill passed in the Senate, the House could remain a stumbling block.

A House-passed bill to enact the treaty includes language to exempt oil and gas companies from complying with a Securities and Exchange Commission payment reporting rule. But the Senate measure, which passed by unanimous consent, without debate, on Saturday, does not have the SEC waiver language.

Alaska Sen. Lisa Murkowski, the top Republican on the Energy and Natural Resources Committee, who cosponsored the bill, said the measure “establishes important ground rules for developing the oil and gas reservoirs along our shared maritime border with Mexico. … It also ensures that any exploration along our maritime border adheres to the highest degree of safety and environmental standards.”

Sen. Ron Wyden, D-Ore., the energy committee chairman and the lead sponsor of the bill, has previously said that insisting on the SEC language could sink the whole measure. The risk, he said, is that Congress will “get bogged down in matters that are simply not relevant to the agreement.”

A moratorium on drilling and production in the boundary area is set to expire in January 2014. After that, Mexico’s Pemex can begin developing oil and gas resources along the boundary area, without the framework established by the U.S.-Mexico hydrocarbon agreement.

The Bureau of Ocean Energy Management has said the areas covered by the treaty could contain 172 million barrels of oil and 304 billion cubic feet of natural gas.

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