The Washington-Pilot- A First Step on Offshore Drilling

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In all the posturing and arguments that have accompanied offshore energy through the years, a few things haven't changed:

- The federal territory allocation map badly cheats Virginia.

- Without changes, no royalty money would flow to the commonwealth.

Nevertheless, advocates have continued to push for oil and gas production in the Atlantic Ocean off Virginia, accompanied by naive assertions that such details eventually would be worked out to the state's benefit.

That was unlikely to happen. Certainly not as long as the commonwealth was willing to give away its bargaining power for nothing in return.

Leaving such structural flaws in place would doom Virginia to decades of futile and lopsided fights in Congress and a generation of lost revenues.

That's why fixing the map and the royalty structure is critical. Once land is leased, once platforms are on their way, Virginia would lose even the little leverage it has to negotiate a better deal for Virginians.
Last week, once again, the commonwealth's leaders tried to do something to avoid that future.

U.S. Sens. Jim Webb and Mark Warner, in legislation endorsed by Gov. Bob McDonnell, proposed amending the federal map and creating a royalty structure that would go a long way to making drilling more attractive for the commonwealth.

Webb and Warner both spoke of the bill -- The Virginia Outer Continental Shelf Energy Production Act of 2011 -- in terms of providing a bridge to cleaner technologies, but there's no doubt that oil and gas are the immediate goal.

"Opening up and expanding Virginia's offshore resources to responsible natural gas and oil exploration," Webb said, "holds significant promise for boosting needed domestic energy production, while bolstering the commonwealth's economy."

The bill would certainly make drilling a more attractive proposition. It would also clarify the benefits that would counter the risks of petroleum production.

The current federal map of offshore territory was drawn several years ago with a bureaucratic certainty that requires an act of Congress to change.

The mapmaking method used -- an arcane principle called "equidistance" -- reduces Virginia's offshore territory to a slim slice of watery Atlantic pie. That's in part because the method used to draw the map was the wrong one, better suited to drawing boundaries across lakes and bays rather than out into the ocean.

The bill would order the federal government to divide the ocean proportionately based on the length of a state's shoreline, a far more equitable prospect, and one that would benefit Virginia.
Compounding the map problem is the money problem.

Under current law, all royalty payments would go to the federal government. The Warner and Webb legislation would instead send 37.5 percent of royalty revenues to the state, with an additional 12.5 percent devoted to conservation, public transportation and alternative energy projects.

The law would also sharpen safeguards for military operations, barring the lease of offshore parcels "if the President, in consultation with the Committees on Armed Services of the Senate and the House of Representatives, determines that the lease of that tract would conflict with military operations relating to national security."

The legislation faces an uncertain -- but undoubtedly difficult -- route through Congress. For Virginia's share of the ocean to be expanded, other states must lose territory. For Virginia to receive a share of oil and gas royalties, other states must lose revenue.

Lawmakers from 49 other states, in other words, must elevate Virginia's interests above their own. That is a tall order in a contentious Congress. But without such changes, there is little reason for Virginia to go forward with offshore drilling.

That's because offshore drilling carries real risks, as the nation saw during last year's blowout in the Gulf of Mexico. The disaster resulted in a series of adjustments to safety regulations; whether they were sufficient to prevent a repeat remains open to argument.

Even if the legislation passes, oil companies will still have a series of hurdles to clear before drilling begins.

"This legislation jump-starts a multi-year process that will include responsible environmental reviews, close consultations with NASA and our military partners in Hampton Roads, and this process will include multiple public hearings," Warner said last week.

That's likely to be a long journey. Even so, it's a process worth beginning, and the legislation represents a responsible and reasonable first step.

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