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Lame Duck GOP Unlikely to Pass Larger Oil Drilling Bill

The Democrats' return to power is increasing pressure on House Republican leaders to accept a limited expansion of offshore oil and gas drilling.

Supporters of such exploration say the next Congress, with Democrats in control come January, probably will not tamper with the long-standing drilling bans that have protected most coastal waters for a quarter-century.

A stubborn standoff has festered for months between the House and Senate over developing more of the oil and gas resources in the Outer Continental Shelf. The dispute is expected to be an issue in the final days of the Republican-run Congress this week when lawmakers meet in a lame-duck session.

The proposal is of great importance to Louisiana and three other Gulf Coast states. They stand to reap hundreds of millions of dollars under changes to the way the government shares royalties from oil and gas taken from the Gulf of Mexico.

House Republicans pushed through a bill that would open coastal waters for drilling everywhere unless a state objects. That essentially would end a ban on such drilling that Congress has imposed annually for the past 25 years in most areas outside the western Gulf.

Even drilling supporters said there was no chance that measure can pass the Senate, which has approved a compromise: opening 8.3 million acres in the east-central Gulf, no closer than 125 miles of land, and leaving other areas alone.

House Republicans, however, have refused to consider the Senate version — until now, after last week's election that drove the GOP from power. Among the incumbents who lost was one of the leading cheerleaders for the broader House bill, Rep. Richard Pombo, R-Calif. He is chairman of the House Resources Committee, which developed the measure.

House leaders have not said whether offshore drilling will come up this week, but pressure to do so has mounted.

President Bush said he wants the issue on the agenda. Senate GOP and Democratic leaders want the House to pass their bill and send it to the White House. A broad coalition of industries that depend heavily on natural gas has urged approval now of the Senate's plan.

The Senate bill would begin sale of leases in the 8.3 million acre area within a year. Actual production probably would not start for several years after that.

"This is not a choice between two bills ... but between getting something done or doing nothing at all. The time has run out on compromise," said the Consumer Alliance for Energy Security, an industry group that includes energy and timber companies, chemical makers and manufacturers.

"We're sending a message as strong as we can. We're pushing them very hard to get it done," said Jack Gerard, president of the American Chemistry Council. He says more domestic production is needed to drive down natural gas prices.

The legislation dramatically would shift how the government shares royalty from offshore oil and gas production. Louisiana, Mississippi, Alabama and Texas would get a substantial windfall.

The House bill eventually would give as much as three-fourths of royalties collected by the government to any state that allows offshore drilling.

The Senate bill would increase royalties for Louisiana, Mississippi, Alabama and Texas from less than 2 percent to 37.5 percent. In 2017, this royalty share would apply to all oil and as produced in the Gulf, not just from the 8.3 million acres newly opened.

Louisiana expects eventually to get an annual flow of more than $650 million a year, compared with about $32 million now from production in state-controlled waters, according to the state's congressional delegation.

Sen. Mary Landrieu, D-La., says the additional money is needed to restore the Gulf Coast. Its barrier islands, wetlands and levees were ravaged by storms, including Hurricane Katrina.

"This is to provide a reliable stream of revenue so that the Gulf Coast states can secure an independent source of revenue to build these levees and restore this coastline," she said in an interview.

She fear that if the measure is not passed now, its chance of becoming law is slim.

Aside from Landrieu, few Democrats have shown much interest in broadening offshore oil production. Even limited expansion in the east-central Gulf worries many lawmakers; they see it as a step toward lifting the long-standing drilling ban in East and West Coast waters and off Florida's Gulf Coast.

Rep. Nancy Pelosi, D-Calif., in line to be House speaker next year, strongly opposes lifting the drilling bans. She also has expressed concern about the revenue sharing provisions, although she has given guarded support to the Senate bill.

Other lawmakers, including Sen. Jeff Bingaman, D-N.M., who will head the Energy and Natural Resources Committee next year, oppose the royalty changes. They say money collected from oil and gas taken from federal waters should stay in Washington.