Democrats Look to Balance More Drilling With Alternative Energy Programs

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With public opinion shifting toward offshore drilling, Democrats are looking to defuse the volatile election issue by allowing oil companies for the first time to explore off the Atlantic and Gulf coasts from Virginia to Florida — but only if they foot the bill for new alternative energy programs.

House Speaker Nancy Pelosi, who not long ago staunchly opposed lifting any of the offshore drilling bans, said Tuesday she now supports an energy package that would including drilling in federal waters off the southeastern coast. She is planning a vote that could come as early as Friday.

"If they (the oil companies) want to drill offshore, we'll say OK," Pelosi told reporters. But she said the bill also will require oil companies to give up $13 billion in tax breaks and agree to pay billions of dollars in back royalties that were avoided because of an Interior Department contracting error in deep-water drilling leases in the late 1990s.

The money would be used to subsidize investments in solar, wind and other renewable energy.

"If you oppose that, what are you saying. I'm for drilling and I want to subsidize Big Oil and I want all of the profits to go to Big Oil," said Pelosi.

Pelosi's proposal mirrors ones being pushed in the Senate — one by the Democratic leadership and another by a bipartisan group known as the "Gang of Ten" that calls for limited offshore drilling from Virginia to Georgia and off Florida's Gulf coast, areas that have been off limits to energy companies for decades because of environmental concerns.

The proposals would open federal waters beyond a 50-mile coastal buffer.

Senate Majority Leader Harry Reid reiterated Tuesday his intention to take up the drilling measures next week.

Republicans in both the Senate and House, meanwhile, are pushing for broader drilling.

House Republican leader John Boehner of Ohio, called Pelosi's proposal "just more of the same. ... It leaves most American energy under lock and key when we should be doing everything possible to expand energy production."

Off-limits areas of the Outer Continental Shelf on both coasts are believed to have at least 18 billion barrels of oil, but more than half of the reserve is found off the West Coast, mainly off California, according to the Interior Department. Mid-Atlantic waters, however, are believed to have large reserves of natural gas as well as some oil.

Offshore drilling has gained political momentum since GOP presidential nominee John McCain made it a central part of his energy plan. At the just-concluded GOP convention, McCain vowed to push for ending the drilling moratoria as soon as possible, prompting delegates to change, "drill, baby drill." Sensing a shift in public sentiment toward more domestic energy development, Democratic presidential nominee Barack Obama has also said he is open to limited expansion of offshore drilling.

Congressional Republicans want to lift all of the drilling bans that cover the Outer Continental Shelf waters 50 miles from shore from New England to Washington states. Oil and gas drilling has been allowed for decades in the western Gulf of Mexico where U.S. offshore energy production has concentrated.

But Republican leaders are adamantly opposed to additional taxes on oil companies. They repeatedly have blocked proposals that would rescind oil industry tax breaks, arguing that would inhibit domestic oil production.

A possible compromise worked out in the Senate by a group headed by Democratic Sen. Kent Conrad of North Dakota and Republican Sen. Saxby Chambliss of Georgia — the Gang of Ten as it is dubbed — calls for both limited offshore drilling and taxing Big Oil, while funneling billions of dollars into renewable energy.

Republican leaders have not embraced the compromise.

"It's the only (approach) that has a realistic chance of getting 60 votes," said Sen. John Thune, R-S.D., one of the "Gang of Ten", making clear that no matter that whatever the energy plan, it will need that much support to overcome a certain Senate filibuster.