House and Senate conferees last week agreed on an omnibus energy bill that may not do much to promote U.S. oil and gas production but at least no longer blocks it.
In a marathon 11 hr session, conferees completed their give-and-take just in time for a final bill to be compiled and be voted on in each house before adjournment.
The bill contains the most far reaching conservation and alternative fuels requirements ever considered by Congress.
HOW INDUSTRY FARED
The oil industry fared very well in the conference, winning most of its major objectives.
Conferees dropped the entire Outer Continental Shelf chapter because of impasses over whether to ban all OCS drilling in certain areas for 5 years and whether the government should buy back leases off Alaska, Florida, and North Carolina that opponents don't want drilled.
Ironically, Alaska's three congressmen, who usually fight hard for oil and gas development, fought equally hard to get leases canceled and bought back in the fishing areas of Bristol Bay.
Left out of the OCS chapter were programs for sharing federal OCS revenues with coastal governments and royalty relief for producers developing fields in more than 200 m of water.
Rigid Senate opposition forced House conferees to drop a provision banning states from using prorationing to limit natural gas production for the purpose of raising prices. Senate conferees noted several federal court decisions prevent that anyway.
Consuming state congressmen also retreated on a provision to protect Canadian gas imports. Opponents argued the U.S.-Canada Free Trade Agreement ensures nondiscrimination against Canadian imports.
The House dropped a plan for the Department of Energy to create a 50,000 bbl petroleum products reserve in the Northeast-there now will be another study-and diluted language requiring the Strategic Petroleum Reserve to be used to thwart price increases rather than just oil shortages.
Deputy Energy Sec. Linda Stuntz called the bill "a good solid step forward in carrying out the National Energy Strategy that President Bush proposed more than 1 1/2 years ago."
A lingering cloud over the bill was Nevada's senators' bitter opposition to environmental studies for a nuclear waste depository at Yucca Mountain. Senate leaders were expected to file a cloture motion to prevent them from filibustering.
AMT RELIEF
Unresolved was an item of major interest to independent producers-relief from the alternative minimum tax (see related story, p. 44).
The Senate finance and House ways and means committees planned to confer separately on that and other energy tax measures. AMT faces competition with other tax breaks for the same revenue sources.
Sen. Bennett Johnston (D-La.), energy committee chairman, said, "Whether we get the tax bill is chancy, and what it will say is very chancy."
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
