Some top S.C. lawmakers are pushing for a change in federal law that would allow drilling for natural gas off the Palmetto State’s tourist-laden coast.

With rising oil prices and Hurricane Katrina highlighting weaknesses in the nation’s energy supply chain, proponents of natural gas exploration say vast supplies of untapped fuel are just waiting off the U.S. coastline — including South Carolina’s.

It is illegal to drill for natural gas off much of the nation’s shores. But plans to lift federal moratoriums are gaining momentum in Washington.

While only the federal government can permit drilling, well-placed S.C. lawmakers are pushing for the change, arguing it could mean a windfall in gas royalties for the state.

“We should be allowed to opt in (to drilling) if we want to,” said state Rep. Harry Cato, R-Greenville, chairman of the House Labor, Commerce and Industry Committee. “It could be a great deal of revenue.”

A Washington-based nonprofit that lobbies to increase energy supplies to manufacturers has estimated that South Carolina could reap $12 billion in royalties over 20 years if allowed to drill for what natural gas might lie off the coast.

“This is extremely conservative,” said Paul N. Cicio, executive director of Industrial Energy Consumers of America.

The group calculated the figure using the U.S. Department of Interior’s latest survey and by assuming the states’ proportion of federal gas royalties would be a fraction of what they now receive from federal oil royalties.

The latest Interior Department survey indicated there might be as much as 327 trillion cubic feet of natural gas off the U.S. coast in areas under federal control — perhaps a 15-year-supply.

Although the actual amount of natural gas off South Carolina or any state is not known, an increasing number of federal and local officials say states should have the right to capitalize on it.

OFFSHORE DRILLING BANS

Before the General Assembly adjourned in June, Cato persuaded the S.C. House to pass a resolution encouraging federal lawmakers to let states decide whether to drop the offshore-drilling bans.

The state Senate did not vote on the issue, but Cato said he will continue to push it when the Legislature reconvenes in January.

In the meantime, he said, he will work to show South Carolinians that gas drilling is more environmentally friendly than oil drilling — which raises the specter of spills, habitat destruction and ugly rigs ruining views from the beach.

In South Carolina, natural gas is consumed far less than other fuels, according to the S.C. Energy Office, a state agency.

In 2001, the last year for which figures are available, natural gas accounted for 9.1 percent of the state’s energy use. That compares to 32.2 percent for nuclear energy, 29 percent for petroleum and 25.6 percent for coal.

U.S. Rep. Richard Pombo, R-Calif., chairman of the House Resources Committee, tried but failed this summer to get the bans on natural gas drilling lifted as part of the federal energy bill that passed in July.

But prospects for his plan look better, considering the recent spike in oil prices and Hurricane Katrina’s disruption of oil and gas operations along the Gulf Coast.

“It’s unfortunate that we had to have Katrina to see that we shouldn’t have all our eggs in one basket and that we need a geographically diverse supply of energy,” Cicio said.

Pombo’s proposal could even appeal to states, such as Florida and California, where support for the bans runs high. They would not only retain the option to remain under a ban, but also could see one extended until 2012.

SUPPLY-DEMAND IMBALANCE

In South Carolina, Charlotte-based Piedmont Natural Gas, the second-largest gas distributor in the state behind Columbia-based South Carolina Electric & Gas, is working with Cato and federal officials to allow states to drill.

“Over the last several years, the wholesale price of natural gas has close to tripled” to more than $10 per cubic foot, said Don Harrow, Piedmont’s vice president for government relations. “There’s an imbalance between supply and demand.”

A spokesman for SCANA Corp., which owns SCE&G, said the company has not taken a position on the moratoriums.

As for Gov. Mark Sanford, he “favors shifting control from states to the federal government,” but wants to study the consequences of lifting the moratoriums more closely, said Sanford spokesman Joel Sawyer. “Right now, the governor believes the state’s focus should be on finding alternative sources of energy,” such as nuclear and hydrogen fuel cells.

Environmentalists are watching the debate with alarm. They say it is a slippery slope between drilling for gas and drilling for oil.

Proponents argue natural gas is far cleaner to tap and use than oil, and natural gas rigs would lie too far from the shore for beachgoers to see.

But the debate is still about oil, said David Farren, an attorney with the Southern Environmental Law Center.

“Sometimes natural gas exploration is used as a euphemism for oil and gas,” he said. “It’s naive at best and disingenuous at worst not to draw the linkage there. You’re talking about risk to some very valuable coastline.”

Farren reminded that coastal tourism is the state’s top industry, bringing in $14.6 billion a year.

“We’re investing billions of dollars in infrastructure to support this tourism industry,” he added, noting the push to build I-73 from I-95 to Myrtle Beach. “It just seems counter to all that to run the risk of opening the coast to this kind of problem.”

Reach Markoe at (202) 383-6023 or lmarkoe@krwashington.com.