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US House approves Democratic leadership's energy bill

Nick Snow
Washington Editor

WASHINGTON, DC, Sept. 17 -- US House members passed an energy bill by 236 to 189 votes on Sept. 16 which Democrats called a true compromise and Republicans labeled a travesty.

HR 6899 came to a vote about 24 hours after it was introduced following some three hours of debate around 9:30 p.m. EDT. Republicans charged that it was designed primarily to give Democrats political cover in their re-election bids by letting them say they voted to open more of the US Outer Continental Shelf to oil and gas leasing.

That claim is false because the measure would permanently ban leasing up to 50 miles offshore where it does not exist already, and allow leasing from 50 to 100 miles offshore only when a coastal state requests it, GOP House members argued. They contended that Democrats omitted revenue shares for coastal states from the bill to reduce the incentive to make such requests.

"We're sitting here tonight in the midst of the biggest sham I've seen in my 18 years in Congress. It locks up 85% of the reserves on the OCS and removes incentives for states to allow drilling by denying them a share of the revenues. There's no compromise here. We're playing political games on the eve of an election," said Minority Leader John A. Boehner (R-Ohio).

The bill's sponsor, Natural Resources Committee Chairman Nick J. Rahall (D-W.Va.), argued that the bill was a compromise because it included provisions not only from a proposal by a bipartisan working group led by Reps. John E. Peterson (R-Pa.) and Neil Abercrombie (D-Ha.), but also the group of US senators calling themselves the Gang of 10. "We did not put revenue sharing into this bill because these are the people's resources. States will realize benefits from new jobs and economic growth without additional bribes," he explained.

A work in progress
Abercrombie said he would have preferred to see HR 6709, the bill that he and Peterson developed with a bipartisan working group which grew to 137 cosponsors, as the legislative vehicle. But he urged support for HR 6899 as a work in progress which can be modified later. "The speaker doesn't want this bill. She doesn't approve of most of its provisions. But she realizes we need to move something along," he said.

At a news conference that afternoon, Speaker Nancy Pelosi (D-Calif.) said that the bill on the House floor would reduce US dependence on foreign oil, protect consumers by lowering prices and taxpayers by demanding full value for resources produced from public lands, and create new US jobs by stimulating alternative energy technology research and development.

"We're really excited about it. My colleagues have told me to tell you that it's time for an oil change in America and this bill represents that," she said.

Jim Matheson (D-Utah), who proposed giving states with oil shale deposits on federal acreage the option of approving or rejecting development, said that HR 6899 used ideas from Republicans as well as Democrats. "If we took a closer look, we could see many areas in it where Democrats and Republicans would agree. We should be having a reasoned debate. Instead, I'm hearing rhetoric from both sides of the aisle," he said.

Expressions of opposition
Trade associations in the oil and gas industry as well as other businesses opposed the bill. "Inclusion of more than $36 billion of new taxes on the oil and gas industry makes no economic sense . . . It would tilt the playing field against the US-based oil and gas companies which must compete with large foreign government-owned companies for resources," American Petroleum Institute President Red Cavaney said in a Sept. 12 letter to Pelosi.

"For far too long, America's offshore development has been unnecessarily prohibited. Finally, Congress appears to be ready to address this key issue. While IPAA comments the Congress for recognizing the importance of developing America's offshore resources, HR 6899 falls short of an effective program and presents new, inappropriate burdens," Independent Petroleum Association of American President Barry Russell said on Sept. 16.

National Petrochemical and Refiners Association President Charles T. Drevna said that denying coastal states a share of new offshore revenues to fund an energy efficiency and renewables reserve robs Peter to pay Paul, while a provision allowing neighboring states to veto a state's decision to allow offshore exploration "is utterly nonsensical."

The National Association of Manufacturers said that it opposed provisions in the bill which would increase energy producers' taxes, including ending the federal tax code Section 199 exemption and restricting foreign tax credits; create a mandatory 15% federal renewable energy standard, and deny coastal states a share of revenues from new federal OCS leasing.

Contact Nick Snow at nicks@pennwell.com.


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