Budget Deal Breaks Logjam on U.S.-Mexico Drilling Pact

The drilling tower of La Muralla IV exploration oil rig, operated by Mexican company 'Grupo R' and working for Mexico's state-owned oil company PEMEX, in the Gulf of Mexico on August 30, 2013. The semisubmersible platform is able to drill to a depth of 10.000 meters in an enviroment such as the Gulf of Mexico.
National Journal
Ben Geman
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Ben Geman
Dec. 11, 2013, 1:28 a.m.

The new Cap­it­ol Hill budget plan clears the way for a U.S.-Mex­ico off­shore drilling agree­ment to pro­ceed, sig­nal­ing the ap­par­ent end of a House-Sen­ate im­passe that has stalled im­ple­ment­a­tion of the 2012 ac­cord.

The agree­ment an­nounced Tues­day even­ing between Sen. Patty Mur­ray, D-Wash., and Rep. Paul Ry­an, R-Wis. has lan­guage tucked in­to it that ap­proves the U.S.-Mex­ico Trans­bound­ary Hy­dro­car­bons Agree­ment.

The bi­lat­er­al drilling ac­cord is de­signed to en­able co­oper­a­tion and leg­al cer­tainty in the de­vel­op­ment of oil-and-gas along a mari­time bound­ary in the Gulf of Mex­ico.

The budget plan an­nounced Tues­day would break a Cap­it­ol Hill lo­g­jam on the drilling ac­cord—if the over­all deal passes.

The un­der­ly­ing U.S.-Mex­ico drilling pact has bi­par­tis­an and White House sup­port. But the House-ap­proved ver­sion of the im­ple­ment­ing bill, which passed in June, in­cluded waivers from a pro­vi­sion of the Dodd-Frank law that re­quires oil-and-gas com­pan­ies to dis­close pay­ments to for­eign gov­ern­ments. The Sen­ate-ap­proved ver­sion of the U.S.-Mex­ico bill, which the White House backed, did not in­clude the lan­guage. House and Sen­ate dif­fer­ences over the bill have delayed fi­nal ac­tion for months.

Sen­ate and Obama ad­min­is­tra­tion aides said the Ry­an-Mur­ray deal jet­tis­ons the Dodd-Frank waiver, but in­cludes oth­er lan­guage from the House-passed ver­sion of the im­ple­ment­ing bill, H.R. 1613.

Obama ad­min­is­tra­tion of­fi­cials say the U.S.-Mex­ico pact will foster de­vel­op­ment with needed safe­guards in place.

“This agree­ment will make nearly 1.5 mil­lion acres of the Out­er Con­tin­ent­al Shelf, cur­rently af­fected by a morator­i­um un­der the West­ern Gap Treaty, im­me­di­ately avail­able for leas­ing and also make the en­tire trans­bound­ary re­gion, which is cur­rently sub­ject to leg­al un­cer­tainty in the ab­sence of an agree­ment, more at­tract­ive to U.S.-qual­i­fied op­er­at­ors,” said Tommy Beau­dr­eau, a seni­or In­teri­or De­part­ment of­fi­cial, in testi­mony for an Oct. 1 Sen­ate hear­ing.

In­teri­or es­tim­ates that the trans­bound­ary re­gion con­tains 172 mil­lion bar­rels of oil and 304 bil­lion cu­bic feet of nat­ur­al gas.

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