12/11/2013 06:14 pm ET Updated Dec 12, 2013

Budget Deal Would Open New Areas Of The Gulf Of Mexico For Drilling

Bloomberg via Getty Images

WASHINGTON -– The bipartisan budget deal unveiled Tuesday night includes a provision that would open up new parts of the Gulf of Mexico for oil and gas drilling.

The proposal includes passage of the U.S.-Mexico Transboundary Hydrocarbon Agreement, which would allow development of oil and gas reserves that cross the international maritime boundary in the Gulf of Mexico. There has been a moratorium in place on drilling in the Western Gap portion of the Gulf since 2000, but it is set to expire at the end of 2013. The agreement included in the budget deal sets standards for both countries to undertake development in this area, and has already won approval from both the Obama administration and Mexico.

Environmental groups aren't fans of the agreement. "This is a continuation of the age-old U.S. approach to energy policy, which is: Give the oil and gas industry what they want," said Jackie Savitz, vice president for North American Oceans at Oceana. "If we continue to expand our production of oil into places that are hard to reach (deepwater), and hard to negotiate (the US-Mexico Boundary), we guarantee future generations the right to experience the worst impacts of climate change."

But members of Congress who support it say that it's better than not having any rules in place at all -- which is what would happen if Jan. 1 rolls around without an agreement in place. "It is good for American energy security, good for jobs and good for the environment to have rules govern energy development in the Gulf of Mexico," Sen. Ron Wyden (D-Ore.), chairman of the Senate Energy and Natural Resources Committee, said in a statement. “This agreement will help extend the U.S. energy revolution throughout North America, making the region more competitive and less reliant on politically tumultuous states for energy."

Athan Manuel, the director of lands protection for the Sierra Club, said the deal is a mixed bag. "The good news is this budget deal reverses some of the harmful cuts of the sequester," he said. "That said, the deal is far from perfect, as it permits more drilling that threatens our coasts and our oceans, and feeds our reliance on dirty fossil fuels."

He said that "the only silver lining to that provision" is that the version included in the deal keeps the financial reporting standards of the Dodd-Frank Wall Street Reform and Consumer Protection Act that the energy industry had wanted waived. The House version of the agreement included the waiver.

Organizations representing the oil and gas industry were supportive of its inclusion. "We think it's a really good sign from Congress that they're trying to encourage offshore development," said Julia Bell, the spokeswoman for the Independent Petroleum Association of America. "It's good for our producers, some of whom are trying to operate in that space offshore."

"At the same time, we are hoping for broader access, such as in the outer continental shelf in the Atlantic," Bell said. The IPAA hopes that the agreement on the Gulf of Mexico is "a sign that our education on these issues is gaining traction."



Obama's Handshakes Around The World