American Petroleum Institute President Red Cavaney on Sept. 12 criticized recent efforts in both the U.S. Senate and House that could open up more areas of the Outer Continental Shelf to drilling, but would also increase taxes on the oil and natural gas industry.

House Democrats are planning on introducing a bill this week that would allow leasing between 50 and 100 miles offshore if a state opts to allow it. The OCS beyond 100 miles would be open to drilling.

"By prohibiting oil and natural gas development within 50 miles offshore, even from those states which favor drilling off their coastlines, the leadership's bill denies Americans access to some of our nation's most promising energy resources," Cavaney said in a letter to House Speaker Nancy Pelosi, D-Calif. He also criticized the House bill's inclusion of new taxes on the industry.

"Additional taxes and fees on the U.S. oil and natural gas industry would undermine our nation's energy security by amplifying the already rising costs to explore for oil and natural gas, as well as discourage new domestic production and new investments to expand refinery capacity," Cavaney said.

He criticized the House bill's "use it or lose it" provision, which would strengthen requirements for companies to drill on already-leased lands. Cavaney said this creates a "false impression that oil and natural gas companies are purposely failing to produce resources on lands currently under lease."

He noted that some leased lands do not contain enough oil or natural gas to produce, and that the process of exploration and finding resources on land takes time.

The House bill would also increase taxes on the oil and gas industry to pay for investment in alternatives. Cavaney said that provision ignores the fact that the industry makes up about 70% of the investment in emerging energy technologies in North America.

"We stand ready to work with you towards policies that encourage all forms of domestic energy production, while avoiding taxes, fees, and penalties that run counter to our shared goal of energy security," Cavaney said.

In the Senate, a bipartisan group of 20 senators are supporting the New Energy Reform Act.

The bill would open acreage in the Gulf of Mexico for leasing and would allow Virginia, North Carolina, South Carolina and Georgia to opt in to leasing off their shores. It would retain an environmental buffer zone 50 miles offshore, where new offshore production would be blocked. The bill would set up a commission to make recommendations to Congress for areas to be considered for leasing. All new production would be required to be used domestically, and it would provide for appropriate revenue sharing for states allowing leasing.

Cavaney said the proposal did not go far enough and said the "approach to access on federal oil and natural gas resources is far too limited in its scope."

"Under this proposal, 68% of the OCS in the lower 48 states will remain off-limits to development. These areas contain about 74% of the undiscovered technically recoverable oil resources and 59% of the gas resources that are currently subject to the OCS moratoria," Cavaney wrote in a Sept. 12 letter to the Senators, echoing a letter he wrote in August.

"This legislation's provision to open up parts of the Eastern Gulf of Mexico to leasing is a good start, but the bill leaves off the table billions of barrels of domestic resources off the table that could be used to enhance our nation's energy security and result in economic growth," he said.