Maureen Lorenzetti
OGJ Online
WASHINGTON, DC, June 20 -- The question of whether to lease the coastal plain of the Arctic National Wildlife Refuge is not settled yet in the US Congress.
It was included in a 68-page draft bill that seeks to address key congressional proposals recommended in the White House's energy task force report.
Under a June 15 draft circulated to oil industry associations, the House Committee on Resources proposes to open a portion of the ANWR coastal plain, renew deepwater royalty relief for Gulf of Mexico leases, make sweeping changes in oil and gas royalty collection, and allow states to take a more aggressive role in managing federal leases within their borders.
The bill also would reduce federal royalties on marginal wells when crude prices fell below $15/bbl, a provision similar to a pending Senate bill by Jeff Bingaman (D-NM), chairman of the Senate Energy and Natural Resources Committee.
Other items in the House bill include a proposal to amend the Coastal Zone Management Act slightly to expedite the appeal process for offshore drilling. Companies operating a "biomass-to-energy" facility that produces electric energy, useful heat, or fuel ethanol could receive a tax credit of $5-$10/ton.
The draft legislation also seeks to remedy energy infrastructure bottlenecks detailed in the White House energy plan. It duplicates an administration proposal for an interagency study of existing rights of way on federal lands to see where new pipelines or transmission facilities could be built.
However, the bill does not go so far as to direct the Federal Energy Regulatory Commission to take over siting authority for electric transmission from the states. The Committee on Energy and Commerce is expected to address that in a separate bill. Currently FERC can approve interstate gas pipeline routes but does not have oversight over the siting of interstate electrical transmission.
The draft resources bill also seeks an inventory of the energy production potential of all federal lands. It also would direct agencies to review regulations to eliminate barriers to emerging energy technology, and seek an interagency agreement on environmental review of interstate natural gas pipeline projects. Those three proposals also were in the White House blueprint and likely will be done regardless of legislation.
Over the summer, pieces of the resources committee bill, along with other energy legislation from other committees, will be moved to the House floor for consideration, according to GOP leaders.
When various proposals are voted out of committee, House Majority Whip Tom DeLay (R-Tex.) has signaled he will oversee the pace and tone of energy legislation that will be considered by the chamber. Industry lobbyists predict that DeLay will not shy from ANWR or other controversial issues in order to pass legislation.
That approach would be starkly different from the Democratic-controlled Senate, where leaders from both parties are voicing a more bipartisan tone, since Democrats have only a one-vote majority.
In the House, the GOP majority is narrow, but large enough that Republicans can still control the legislative agenda. Energy legislation is expected to be voted out of committees soon after Congress returns from the July 4th recess.
How long the ANWR provisions will survive in the House is uncertain, although even proponents do not expect it to survive, given the fact moderate Republicans oppose drilling and Senate leaders also object. The White House supports ANWR exploration but has admitted the chances it will become law are small.
But for now at least, House Republican leaders want to make clear they are not giving up on the coastal plain without a very public fight.
Over half of the resources draft bill is devoted to ANWR. It includes detailed provisions that would expedite judicial review of lawsuits related to opening the coastal plain, rights-of-way issues, local government impact aid, and community service assistance.
It also would establish two funds that would be built with ANWR lease bonuses and production royalties. One would be earmarked for renewable energy technology; another would be used to maintain federal lands.
While there is much for industry to like in the draft Resources bill, Republican lawmakers did delete some earlier provisions that ran afoul of either the White House or states. At one point, lawmakers considered amending the Coastal Zone Management Act so states had less opportunity to appeal offshore drilling, but the National Governors Association resoundingly opposed that plan.
Similarly, the Department of Interior objected to a draft proposal backed by industry that would have forced the government to accept royalty-in-kind for all leases (OGJ Online, June 12, 2001). Instead, the draft bill would give Interior the opportunity to expand RIK to all leases if it so chooses.
Contact Maureen Lorenzetti at [email protected]