Lawmakers moving toward compromise on House OCS bill

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Sept. 10 -- Responding to US House Natural Resources Committee Republican complaints that the Outer Continental Shelf bill he cosponsored with US Rep. Tim Murphy (R-Pa.) didn’t go far enough, Rep. Neil Abercrombie (D-Ha.) said bipartisan compromises would be more productive than extreme positions.

Abercrombie dispensed with summarizing his prepared testimony during a Sept. 9 hearing by the committee’s Energy and Mineral Resources Subcommittee on HR 2227 after Reps. Doug Lamborn (R-Colo.), the subcommittee’s ranking minority member, and Doc Hastings (R-Wash.), the full committee’s ranking minority member, said House Republican leaders’ “all of the above” energy legislation was preferable.

“I consider this the most important hearing that’s taking place today in terms of what Congress can do to stabilize this nation’s economic future,” said Abercrombie, who introduced HR 2227 with Murphy on May 4 and who also serves on the full committee. “This is the only bipartisan energy bill in this Congress. The Republican proposal that Mr. Lamborn and Mr. Hastings referred to isn’t going to be considered.”

Murphy said the bill, which includes a provision to use portions of new federal offshore oil and gas leasing revenues for energy conservation and research programs, would be the most ambitious energy and environmental bill in US history.

“And this legislation will be paid for: Developing our own resources will bring an estimated $2.2 trillion to $3.7 trillion in federal revenue. With this bill, we truly began the path toward a clean energy future by investing in clean energy, creating US jobs immediately and long into the future, [and] cleaning the environment, all without raising taxes,” he maintained.

‘More robust’
Following the hearing, the subcommittee’s chairman, Jim Costa (D-Calif.), told reporters that he and the bill’s 36 other cosponsors would like to talk to the full committee’s chairman, Nick J. Rahall (D-W.Va.) about moving HR 2227 forward. Noting that Rahall on Sept. 8 announced his own energy bill, which would make major changes in the federal mineral leasing system, Costa said: “We think a more robust proposal has a better chance.” He added that he also would encourage US Interior Sec. Ken Salazar to expedite a new 5-year OCS plan.

“Chairman Rahall knows about this bill’s existence and our desire to move it forward,” added Abercrombie, who was sitting nearby. “So far, our talks have been collegial.”

In addition to distributing $440 billion, or 20%, of projected new federal OCS revenues to a renewable energy and energy efficiency reserve for research and development, HR 2227 would send $660 billion, or 30%, to producing states which work with the federal government to allow exploration and production of offshore resources; $220 billion, or 10%, to fund clean coal technology and carbon capture and sequestration research; $220 billion, or 10%, to an environmental restoration reserve; and $220 billion, or 10%, for the general federal treasury.

A further $176 billion, or 8%, would go to a conservation reserve; $110 billion, or 5%, to a carbon-free technology deployment and nuclear energy reserve; $110 billion, or 5%, to a clean water reserve; and $44 billion, or 2%, to the Low Income Home Energy Assistance Program (LIHEAP).

The measure also would approve the 2010-15 OCS plan and expedite reviews; expedite lease sales; extend coastal states’ boundaries from three to a uniform 12 nautical miles, providing jurisdiction for state royalty payments within the 12 miles; establish an expedited inventory of offshore energy resources; repeal the ban on oil and gas development within 125 miles of shore in the eastern Gulf of Mexico; and establish procedures to expedite judicial reviews of oil and gas leases.

‘Aren’t in stone’
When Hastings asked Abercrombie if he would object to HR 2227’s being offered as a substitute to Rahall’s or another House Democratic energy bill, Abercrombie said he would not. But he also urged House Republican leaders to join the working group for his and Murphy’s bill and present ideas from their own plan.

“The members who worked on this bill didn’t agree to every provision, but they kept working on it. The numbers aren’t written in stone,” he said. Attaching HR 2227 to other legislation also would be acceptable, he added.

It’s imperative for Congress to pass an energy bill, Murphy said. “I don’t want to repeat the mistakes of the 1970s, when oil prices went down and America went back to sleep. Members of [the Organization of Petroleum Exporting Countries] want oil back at $90/bbl soon and $200/bbl within 2 years,” he said. The US should continue pushing for efficiency, conservation, and alternatives and developing more of its domestic oil and gas resources, he maintained.

Speaking with reporters, Murphy said the bill’s core working group involved six to eight House members and their staffs, with input from several other members. Responding to Hastings and Lamborn’s suggestions that the bill falls short of what is needed, the Pennsylvanian said: “This bill has so many elements in it I’d be hard-pressed to think of what’s been left out. But we’re one oil embargo away from economic catastrophe. Being too dogmatic just leads to a big coughing session.”

Responding to Costa’s question about what Abercrombie thinks the Obama administration’s energy policy approach is, the member from Hawaii replied: “I see a policy that’s trans-Cabinet” with the energy and interior secretaries and Environmental Protection Agency administrator working together under the direction of Carol M. Browner, White House coordinator of energy, environmental, and global climate change policy.

He also suggested that, as others in Washington concentrate on health care and overall economic issues, recognition is growing in Congress that nonpartisan, constructive energy legislation needs to be passed. “Every day, we get more information that something needs to be done, that we can’t keep sending billions of dollars overseas, and that this country needs to use all technologies to be energy-independent,” he said following the hearing.

Other witnesses
Two witnesses on a second panel presented contrasting views. Doug Morris, the American Petroleum Institute’s upstream and industry operations director, reiterated API’s position that the nation needs a balanced, fact-based energy policy promoting efficiency and conservation and greater supplies of all forms of energy, including oil and gas. “Passage of this legislation would mean new jobs; more revenues for cash-strapped local, state, and federal governments; and greater energy security for our country,” he said.

Athan Manuel, the Sierra Club’s lands protection program director, said the environmental organization supports most of HR 2227’s provisions but opposes oil and gas activity on the OCS where it is not taking place already. He said wind power would be better, prompting Lamborn to suggest that the Sierra Club’s own estimates project that 300,000 windmills, or 166 for every mile of shoreline, would be required to fully realize wind energy potential off the East Coast. Manuel responded that the number probably would be less as the wind energy industry develops more efficient technology with smaller windmills and uses floating, instead of fixed-leg, production platforms.

Several organizations said they were pleased that the subcommittee held the hearing, which more Republicans than Democrats attended.

“While some of the debate in Washington continues to focus on how to discourage domestic oil and gas production, through burdensome federal regulations and even higher taxes, today’s hearing was an honest, forthright, and energizing discussion about the role that affordable, available energy will continue to play in our economy,” said Independent Petroleum Association of America Pres. Barry Russell. “It is encouraging that Democrats and Republicans are coming together, joining hands, and working to end the ban on offshore energy production.”

David Holt, president of the Consumer Energy Alliance, called the hearing timely. “In less than 2 weeks, the Interior Department’s public comment period regarding the upcoming 5-year OCS plan will close, and the fate of domestic energy production for the next several years, and possibly well beyond that, will in part be determined,” he said.

Thomas J. Pyle, president of the Institute for Energy Research, said he hoped the hearing sent a message to Salazar. “If we are to remain competitive in a highly competitive global economy, we cannot continue to turn our backs on America’s energy,” he said. “Instead of putting up endless roadblocks to energy production, the Obama administration should be standing shoulder to shoulder with these responsible policymakers.”

Contact Nick Snow at nicks@pennwell.com.

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