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CQ TODAY ONLINE NEWS – ENERGY
May 16, 2011 – 6:45 p.m.

With White House Weighing In, Senate Turns to Oil Production Measures

By Geof Koss, CQ Staff

Senators are pressing forward this week with legislation that mirrors some of the initiatives for boosting domestic offshore oil production that President Obama embraced over the weekend.

The president announced a series of administrative actions addressing permitting and leasing, amid criticism from Republicans who accuse the administration of pursuing policies that restrict drilling and push up gas prices.

At least two bills that will be the subject of an Energy and Natural Resources Committee hearing Tuesday would promote similar objectives. The bills may be marked up as early as next week.

Mark Begich, D-Alaska, will testify in support of his bill (S 843) to create a new office to coordinate offshore drilling applications in his state — a process that repeatedly has been criticized as cumbersome.

In his radio address over the weekend, Obama announced a new federal team to streamline handling of Alaska drilling permits — winning applause from Begich and Lisa Murkowksi, the state’s senior senator and the Energy panel’s top Republican. A Senate aide noted that Begich’s bill would also allow for state and local government participation in the process, and would authorize funding.

Kay Bailey Hutchison, R-Texas, is scheduled to testify on her bill (S 516) to extend for one year leases that were affected by a drilling moratorium that the administration implemented in response to the April 20, 2010, Deepwater Horizon drilling accident. The well gushed oil from the bottom of the Gulf of Mexico for months and is considered the worst U.S. environmental disaster ever.

A blanket one-year extension for such leases was also among the steps that Obama announced over the weekend. Hutchison called Obama’s announcement “welcome news,” but she said it was “unclear what leases will be extended and for how long.”

“Until we have assurance that every moratorium-impacted lease is made whole, I will continue to push the [legislation],” Hutchison said.

Among the other steps Obama announced were the establishment of annual lease sales in Alaska’s National Petroleum Reserve, accelerated efforts to inventory offshore reserves in the mid-Atlantic region, and the resumption of lease sales in the western and central Gulf of Mexico that were canceled after last year’s spill.

Interior Secretary Ken Salazar and Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement, also are scheduled to testify Tuesday.

Also on the committee’s hearing agenda is a bill (S 916) introduced by Energy Chairman Jeff Bingaman, a New Mexico Democrat, to require an inventory of all offshore oil and gas reserves, and legislation (S 917) mandating new offshore drilling safety procedures.

Environmentalists Unhappy

The president’s new proposals drew criticism from environmentalists, including the Sierra Club, which headlined a May 14 news release: “Has Big Oil Amnesia Spread to the White House?” Drilling proponents, meanwhile, offered muted praise.

With White House Weighing In, Senate Turns to Oil Production Measures

Mary L. Landrieu, a Louisiana Democrat who has been critical of the White House’s offshore drilling policies, called the president’s initiatives “encouraging,” but said that the administration should work to further expedite the processing of new permits.

Republicans, who for months have linked rising gas prices to the administration’s drilling policies, were in no hurry to let go of what they view as a winning political issue.

House Natural Resources Chairman Doc Hastings, R-Wash., called the actions “minor political tinkering.”

“While positive,” he said, the policies do not “erase the administration’s long job-destroying record of locking up America’s energy resources.”

The Senate is expected to vote this week on competing energy proposals, including a Republican bill (S 953) modeled on three House-passed drilling bills (HR 1229, HR 1230, HR 1231). The bill would impose new deadlines on the administration for processing drilling permits, while directing Interior to conduct canceled lease sales planned for Virginia and Alaska. It also would extend for one year leases stalled by the moratorium.

Democrats will counter with a bill (S 940) that would cancel about $21 billion in tax breaks enjoyed by oil and gas companies, with the savings steered toward deficit reduction.

Neither bill is expected to get the 60 votes necessary, and Majority Leader Harry Reid, D-Nev., has said he would like to bring energy legislation capable of winning bipartisan support in the energy committee to the floor before the Memorial Day recess.

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