Themes emerge as Congress works on separate energy bills

Nick Snow
Washington Correspondent

WASHINGTON, DC, June 13 -- Republicans at each end of the US Capitol said Democrats' energy proposals would do nothing to increase domestic supplies. Democrats responded that it was more important to increase incentives for fossil fuel alternatives than to continue what some members consider giveaways to the oil and gas industry.

Activity on June 13 centered on the full Senate's debate of the Democratic leadership's energy legislation and the House Natural Resource Committee's approval by 26 to 22 votes of a bill with several provisions that directly affect oil and gas producers and federal regulators.

Those provisions include imposing a $1,700 processing fee for each drilling permit application, limiting categorical exclusions from the National Environmental Policy Act, regulating produced water disposal, limiting oil royalty in-kind payments to refilling the Strategic Petroleum Reserve, requiring the US Minerals Management to conduct at least 550 audits yearly by 2009, significantly increasing surface landholders' rights and compensation in split-estate situations on federal leases, and raising onshore oil and gas reclamation fees and bonds.

The bill, HR 2337, which will be reported to the House floor with a favorable recommendation, would preserve the 2005 Energy Policy Act's (EPACT) requirement for BLM to complete onshore drilling permit requests but it would extend the deadline to 90 from 30 days. Chairman Nick J. Rahall (D-W.Va.) supported the change, which emerged during the first day of markup on June 6.

Groups representing domestic oil and gas producers immediately criticized the bill that emerged. "One has to wonder why members of Congress would vote for legislation that will decrease domestic supplies of oil and gas at a time when consumers are already suffering from high prices," said Marc W. Smith, executive director of the Independent Petroleum Association of Mountain States in Denver.

'Strangling supplies'
"At a time when American consumers are bracing for record-high summer energy costs, why is Congress passing legislation that will ultimately increase their financial hardships by strangling American energy supplies?" questioned Barry Russell, president of the Independent Petroleum Association of America in Washington, DC. "There are still members of Congress who fail to recognize that energy legislation designed to limit American access to American energy will ultimately deplete supplies and boost consumer energy prices."

Efforts to substantially change the bill failed. The main attempt was an amendment by Rep. Stevan Pearce (R-NM) to strike all of Titles I and II, which contain most of the oil and gas provisions and which Rahall called "a killer amendment" that "would kill the entire bill." It was defeated by 27 to 21 votes.

More-specific amendments also did not pass. The committee rejected one by Rep. Bill Sali (R-Idaho) to strike Titles I and II if the US Energy Secretary determines that they would increase domestic energy prices by 25 to 17 votes. It also defeated, by 26 to 22 votes, a proposal by Rep. Chris Cannon (R-Utah) to delete Section 104 of HR 2337, which would repeal EPACT's provision dealing with federal oil shale and tar sand resource leasing and development.

"The potential for oil shale development in Utah to vastly decrease our dependence on foreign oil makes this bill not only bad policy, but bad for national security. Environmental hysteria never lit one light bulb or heated one home, and with [gasoline] prices at more than $3/gal, now is not the time to be turning off the spigots from promising resources," Cannon said in a June 13 statement.

House Republican leaders beyond the committee leveled a broadside against the bill on June 12. The new House Energy Action Team (HEAT), working through the office of Minority Whip Roy Blunt (R-Mo.), said that HR 2337's provisions would discourage development of domestic resources and increase reliance on imports.

Senate activity
In the Senate, debate continued on the legislative package which Democratic leaders announced on May 23. The bill aims to make oil product price manipulation a federal crime, mandate more efficient government offices and motor fleets, increase biofuel supplies, and bring other alternative fuels to market more quickly.

Discussion quickly centered on an amendment proposed by Sen. James Inhofe (R-Okla.) to provide additional incentives to build new US refineries, which he said the Democrats have failed to address. "Americans are starving for affordable energy, and the majority's bill tells them to go on a diet," he said on June 12.

Sen. Barbara Boxer (D-Calif.), who succeeded Inhofe as chair of the Environment and Public Works Committee following the 2006 election, immediately called his proposal "a total taxpayer giveaway to the oil industry." She said, "It would short-cut many environmental laws which protect our families." Not one oil company has opened a new US refinery since EPACT and its incentives became law, she said.

Other Republicans expressed support for Inhofe's amendment as debate continued on June 13. Mel Martinez of Florida said that the overall bill does nothing to remove barriers to building new oil refineries in the US. "We have not built a new one in this country for over 30 years because of burdensome regulations," he said, adding that the bill's attempt to make gasoline price manipulation a federal crime also is misguided.

"The price at the pump is affected by both a lack of refining capacity and a surplus of regulations on the fuels that are produced," said Mike Enzi of Wyoming. "Unless we get rid of this refinery constriction, we're going to face gasoline shortages twice a year, starting immediately."

But Maria Cantwell (D-Wash.), who has led efforts on the Senate side to make oil market manipulation a federal crime, agreed with Boxer that Inhofe's amendment would throw out important environmental requirements. Besides, said Cantwell, progress on increasing motor fuel production capacity is being made because in the last 4 years, 40 new alternative plants have been built or are awaiting permits.

The Senate defeated Inhofe's amendment by 52 to 43 votes at midday June 13. It then turned its attention to a proposal by Energy and Natural Resources Committee Chairman Jeff Bingaman (R-NM) to require electric utilities to get at least 15% of the power they sell from renewable sources by 2020.

Among other benefits, said Bingaman, this would reduce pressure on natural gas to generate electricity and reduce gas prices in the process.

Contact Nick Snow at nsnow@cox.net.

Related Articles

Victoria extends drilling, fracing ban

01/30/2015 The new Victorian Labor government of premier Daniel Andrews has extended the coal seam gas (CSG) exploration and hydraulic fracturing ban in the s...

US Senate passes bill approving Keystone XL pipeline project

01/30/2015 The US Senate has passed a bill approving construction of the proposed Keystone XL crude oil pipeline by a 62-36 vote after 3 weeks of debate. Nine...

Pennsylvania governor reinstates state forest drilling moratorium

01/29/2015 Pennsylvania Gov. Tom Wolf (D) signed an executive order fully reinstating a 2010 moratorium on new oil and gas leases in state forests and parks. ...

DOE could meet 45-day LNG export decision deadline, Senate panel told

01/29/2015 The US Department of Energy would have no trouble meeting a 45-day deadline to reach a national interest determination for proposed LNG export faci...

Harvest drops Venezuelan arbitration move

01/29/2015 Affiliates of Harvest Natural Resources Inc. have withdrawn a request for international arbitration alleging the government of Venezuela hampered e...

API forms Colorado Petroleum Council, picks executive director

01/29/2015 The American Petroleum Institute has opened a Denver office that will focus on oil and gas priorities in Colorado. Tracee Bentley, who previously w...

US House approves bill aimed at increasing LNG exports

01/28/2015 The US House of Representatives passed a bill aimed at increasing US LNG exports by requiring the Department of Energy to determine whether a proje...

PHMSA outlines community steps to reduce pipeline incident risks

01/27/2015 The US Pipeline and Hazardous Materials Safety Administration released a guide to best practices for communities to reduce risks from pipeline inci...

DOI’s 2017-22 draft proposed OCS program includes Mid-Atlantic sale

01/27/2015 The US Department of the Interior released a draft proposed 2017-22 Outer Continental Shelf management program that included 14 potential oil and g...
White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


Prevention, Detection and Mitigation of pipeline leaks in the modern world

When Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST



On Demand

Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected