Barbour defends leasing of state waters for energy exploration

GULF OF MEXICO — Allowing oil and gas drilling 10 to 12 miles south of Mississippi’s coastline in the Gulf of Mexico is a good idea because it could generate state revenue, Gov. Haley Barbour said yesterday.

The Mississippi Development Authority on Monday published proposed regulations to lease state waters in the Gulf for the drilling.

The regulations are open for public comment until Jan. 20. If they’re approved, a lease sale could take place in 2012, MDA spokesman Dan Turner said Monday.

The Republican governor leaves office when his second term ends Jan. 10.

During a news conference yesterday in Jackson, Barbour said that starting in 2017, federal law would allow the state to collect 100 percent of royalties if oil or gas were found offshore in state waters. The state would collect 35 percent of royalties if it’s found in federal waters south of the state. A royalty is a share of the revenue the driller generates if oil or gas is found.

Barbour said the proposed regulations “would create a strip about 10 miles offshore in Mississippi that would be anywhere from less than a mile to maybe as much as two miles wide, that runs east and west, that could be leased.”

Mississippi law prohibits drilling inside the barrier islands, about 10 miles out; an exception is a narrow north-south strip near Alabama. Federal waters begin roughly 12 miles out.

Barbour said rigs and platforms wouldn’t be visible from the mainland if drilling were allowed in state waters. Drilling opponents, including Sierra Club leaders, dispute that.

Barbour said drilling would not be allowed with a mile of any barrier island.

He said rigs and platforms in state waters might be visible from barrier islands, including Ship Island, which is a warm-weather tourist destination with its clear waters and normally clean beaches.

“If you’re on, say, Ship Island, and you look to the south, a well that is more than a mile and a well that’s a little more than two miles, during the three- or four-month drilling period, you can probably tell what it is,” Barbour said. “But once you finish drilling and you have a production platform out there, they are so low, they sit so low in the water, that it’s unlikely you can tell the difference between a production platform in state waters and a production platform in federal waters.

“However,” he said, “you can tell the difference when the federal government gets to keep 65 percent of the revenue versus us getting to keep 100 percent of the revenue if it’s in state waters.”

State officials said they believe that state waters largely hold natural gas, reducing the threat of large oil spills. They estimate drilling could produce $250 million to $500 million for the state over time, most of which, by law, would be directed to education.

Mississippi Sierra Club head Louie Miller on Monday said Barbour is doing a favor for the oil industry.

“Haley Barbour is blowing a kiss to BP on his way out the door,” Miller said. “Less than three weeks left in office and he wants to pull a fast one.”

Miller said drilling would spoil the Gulf Islands National Seashore, including two islands designated as wilderness areas. He also said that any economic gains to the state would be outweighed if tourists are driven away by drilling.

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