The scoop on energy bills in Congress: offshore drilling, oil shale, renewable tax credits, and more
What’s really up with the energy bills in Congress? Will we see oil rigs off the coast of New Jersey anytime soon? Will Congress actually get anything done before it adjourns next week?
As the clock ticks down on the 110th Congress, it’s not entirely clear what we can expect in terms of energy.
The energy bill that passed the House last week would allow offshore oil drilling 100 miles off U.S. coastlines. The buffer zone could be reduced to 50 miles if a state’s governor and legislature consent, which is a big “if”, since the leaders of many coastal states are opposed to offshore drilling, or simply don’t have much oil to offer. And since the bill does not include provisions to share revenues from offshore leases with states, there would be little incentive for state governments to consent — especially in those states that have lucrative fishing and tourism industries that might be impaired by drilling.
If a state’s leaders did want to move toward approving offshore drilling, the process would likely take a while — first passage of a bill by the legislature, then signing by the governor. Additional time would be needed for the federal government to put together an oil lease sale. At the last federal auction of offshore oil leases in August, 90 percent of the acreage received no bids. And oil companies might be even less excited about leases 50-plus miles from shore; they say most recoverable oil and gas reserves are within 50 miles of shorelines, and they point out that drilling further out to sea is more difficult and expensive.
The House energy bill also clears the way for commercial-scale oil-shale extraction on federal lands — but again, only with consent from states. Of the three states that would be primarily affected, Colorado and Wyoming have leaders who are opposed to development. Utah is the only state likely to give its OK.
So why did the Democrats — the majority of whom have long objected to increased oil extraction on federal lands — put offshore-drilling and oil-shale provisions into their energy package? It’s partly election-year politics — Americans are telling pollsters they want the federal government to tap more domestic energy sources. And it’s partly an attempt to get some sort of protection in place for coastal areas and lands with oil-shale potential. The congressional moratoriums that currently block leasing on both expire at the end of this month. If new offshore-drilling rules aren’t passed, oil platforms would be allowed as close as three miles to coastlines. And without new rules on oil-shale development, the Bush administration would likely proceed with oil-shale leasing with or without the states’ consent, which they’ve been laying the groundwork to do all summer.
Enviros are predictably unhappy about the offshore-drilling and oil-shale provisions of the House bill, but insiders on the Hill argue that this was probably their last best hope. Democratic leaders in the House didn’t think they had the votes needed to extend the moratoriums as they currently exist, and even if they did pass an extension initially, they wouldn’t have had enough votes to override the likely presidential veto.
Democrats probably expected that the drilling component would attract at least a decent handful of Republicans and get them closer to a veto-proof majority, but in the end only 15 Republicans voted for the bill (and 13 Dems voted against). The Democratic leadership did themselves no favors with a late release of the bill; their caucus was still hashing out the particulars until 9:45 p.m. the night before debate was set to begin. The short time frame between introduction of the bill and the vote caused some to object on a procedural basis.
Essentially, Democrats wagered that including limited drilling was the only way to prevent the lifting of all restrictions on oil shale and the outer continental shelf come Oct. 1.
“At the end of the month, those protections were going away, and we don’t have the votes to extend that,” said a Democratic Hill staffer, speaking on the condition of anonymity. “You’re facing no protection versus we can put in some protection.”
Democratic leaders in the House were also trying to call the Republicans’ bluff. All summer, House Republicans had been demanding a vote on their drilling-heavy “all of the above” energy bill. At the same time, Democrats had been trying to pass measures that would promote renewable energy, curb oil-market speculation, raise taxes on oil companies, and release some oil from the Strategic Petroleum Reserve. The Democrats added some drilling to their package, making it a compromise, but they knew full well that most Republicans would vote against it. The Republicans argue that the Dems’ bill would do far too little to make more domestic oil available — a “hoax drilling bill,” they’re calling it. But the Dems are saying they gave the Republicans what they wanted — “all of the above” — and blaming the Republicans for once again voting against renewable energy.
This week the action shifts to the Senate. The renewable-energy tax-credit extensions that expire at the end of this year also need to be renewed, and while they have passed repeatedly in the House, they keep stalling in the Senate. The Senate was expected to vote Friday on a new compromise tax package that includes the renewable tax-credit extensions, but the vote was pushed back until this week. The Senate was also expected to debate the “Gang of 20” compromise energy bill this week, but the bipartisan group sponsoring the bill decided to pull their legislation until next year. As one Republican aide told Politico, “the politics aren’t there” to pass this bill this year. Now it looks like the Senate is likely to take up debate of the House energy bill on Tuesday.
A spending bill must also be passed by the end of the month in order to continue government funding into the new fiscal year that starts on Oct. 1. Republicans have threatened to oppose the spending bill if Democrats don’t agree to lift the congressional ban on offshore drilling. Following through with that threat would effectively shut down the federal government, which hasn’t happened since 1996. Government shut-downs aren’t popular with the public, so it would be a politically risky move.
There’s also the possibility that Bush would veto any spending bill that does pass both houses of Congress, which could also prompt a shutdown. But Bush probably doesn’t want to risk that either, since it would be one of the final actions of his presidency, and if government’s not working, he might not be able to push through 11th-hour actions.
If Congress doesn’t get an appropriations bill through — which increasingly looks like the most likely scenario, as the economic crisis is currently dominating the Senate — they will have to pass a continuing resolution (CR), a temporary extension of the elements necessary to keep the government running until the next Congress convenes in January 2009.
A draft version of a CR currently circulating includes the House energy bill’s language on offshore drilling and oil-shale development. Republicans, of course, are not fans of this provision. While Bush has said he opposes an outright extension of the moratoriums, he has not yet indicated whether he would sign off on legislation that includes some protections.
With Congress set to adjourn this weekend, there’s a lot to be hashed out over the next five days. Stay tuned.