Drilling bill clears House, but unlikely to pass Senate

Dale Eisman

Sep. 17, 2008 (McClatchy-Tribune Regional News delivered by Newstex) -- WASHINGTON -- A sharply divided House of Representatives agreed Tuesday to open millions of acres off the nation's coastlines to oil and natural gas production but set conditions that could to keep much of that seabed free from drilling.

If it becomes law -- and Senate passage is considered unlikely -- the bill drafted by Democratic leaders would end a 25-year moratorium on most offshore drilling.

A buffer zone extending 50 miles from the coast would remain off-limits, however. Virginia and other coastal states would control areas between 50 and 100 miles offshore, and federal authorities would issue leases for drilling between 100 and 200 miles out.

Virginia's Republican-controlled General Assembly already has signaled its support for drilling. But Gov. Timothy M. Kaine, a Democrat, has endorsed only exploration and favors a 50-mile buffer.

Passage came on a 236-189 vote after a day of sometimes bitter debate. Because President Bush already has ended a separate, presidential moratorium on offshore leases, Democrats warned that unless Congress passes a new plan this year to regulate drilling, the administration could open areas as little as 3 miles offshore to energy production.

"We will not be forgiven if we fail to move an energy bill forward," said Rep. Neil Abercrombie, D- Hawaii . He had helped lead a bipartisan group this summer in crafting a more drilling-friendly bill but ultimately urged passage of the Democratic proposal.

Because the House bill cuts Virginia and other states out of any share of royalties that companies would pay on oil and gas produced offshore, even drilling supporters doubt that their states will agree to drilling.

"Virginia gets zero... The effect of this legislation will be that none of these coastal states will allow drilling," said Rep. Thelma Drake, a Norfolk Republican. The bill "is not only a hoax, it is cruel," she said.

House Speaker Nancy Pelosi, D-Calif., said the legislation will "rearrange the financial relationship between the American people, their oil, and Big Oil." The bill would end tax breaks enjoyed by major oil companies and spur development of alternative, renewable energy sources, she said.

Republicans dismissed the measure as a sham, drafted to give the majority party political cover from voter outrage over gasoline prices that topped $4 per gallon this summer. Close to 90 percent of the 18 billion barrels of oil thought to lie off the nation's coasts is believed to be within the 50-mile buffer, they said.

Other Republicans complained that the bill would do nothing to promote the use of coal and nuclear energy, sources they said could be developed quickly. And the plan was drafted by the majority in secret and rammed through the House before most members even had a chance to read it, they contend .

"They don't want to be bipartisan... Off the camera, they're going to put their arms around us and say, 'Don't worry about it, because this bill's never going to become law,' " said Rep. Randy Forbes, a Chesapeake Republican.

While most of its provisions have been discussed informally for months, the 290-page bill was not filed until 9:45 p.m. Monday and was considered Tuesday under rules that blocked Republicans from proposing revisions.

Whatever its fate in the Senate, the bill's passage in the House was at least a symbolic break between Democratic leaders and environmental activists with whom they've long been allied.

"The House energy bill falls short of what Americans really need to meet our energy challenges," said Frances Beinecke, president of the Natural Resources Defense Council. "Big Oil is playing off the fears Americans faced with rising gas prices and is distorting the facts."

Pro-drilling business groups also were unhappy. A statement from the Independent Petroleum Association complained that the bill would continue to keep drillers out of the eastern Gulf of Mexico, where "the potential to produce resources and deliver them... is the highest and the quickest."

Though Tuesday's debate focused on offshore drilling, Democrats said the bill represents a broad attack on energy shortages and energy prices. Its provisions include:

- A ban on the export of oil and gas extracted from fields in Alaska. While the bill maintains a ban on drilling in the Arctic National Wildlife Refuge in that state, it would permit leasing and drilling in the National Petroleum Reserve, elsewhere in Alaska.

- Release of 10 percent of the oil in the federal government's strategic reserve, a move supporters say will push down retail gas prices.

- New tax credits for companies developing a variety of alternative energy (OOTC:AEGC) sources, including wind and solar energy and biofuels.

- A requirement that utility companies generate at least 15 percent of their electricity from renewable energy sources by 2020.

- A requirement that major oil firms provide at least one "alternative fuel pump" at each company-owned service station by 2018.

Dale Eisman, (703) 913-9872, dale.eisman@pilotonline.com

Newstex ID: KRTB-0212-28109327