Senate approves more offshore drilling, but not as much as the House wants.

Published 4:11 pm Wednesday, August 2, 2006

The Senate wants to expand oil and gas drilling to a large chunk of the Gulf of Mexico that has been off limits to energy companies.

But the House has a more ambitious plan: Open coastal waters to drilling everywhere unless a state objects.

Opening the Outer Continental Shelf to oil and gas rigs has moved to the center of the energy debate in Congress where lawmakers for months have struggled to respond to growing anger among voters over high energy prices — a particular problem in an election year.

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By a vote of 71-25 Tuesday, the Senate passed a bill directing the Interior Department to begin selling leases for oil and gas development in 8.3 million acres of the east-central Gulf of Mexico — about 100 miles from the nearest land and 125 to 310 miles from Florida beaches.

Moving toward a monthlong summer recess, the Senate still faces a rush of business including approval of a $444.6 billion Pentagon funding bill that also has an additional $50 billion for the Iraq war.

GOP leaders also hoped to vote Friday on a bill that would both raise the minimum wage and make permanent a cut in the estate tax while extending a variety of popular tax breaks such as deductions for college tuition. Democrats are trying to block the tax-wage bill, arguing the two issues should not be combined.

A debate on legislation to deal with an overhaul of federal pension law, passed by the House before it adjourned last week, could take senators into the weekend.

Many Senate Republicans called Tuesday’s vote a breakthrough that could lead to opening more ocean waters that have been under a drilling moratorium for 25 years. The House passed legislation in June that would end the moratorium everywhere and allow development 50 miles off any state unless it formally objects.

But that fight is for another day, Sen. Pete Domenici, R-N.M., told reporters Tuesday.

Any bill that goes beyond the 8.3 million acres would run into a filibuster in the Senate, requiring 60 votes to overcome, he said. “It’s a monster that you have to jump” and the votes aren’t there.

Domenici will lead Senate negotiators in a conference with the House on offshore drilling in September so his remarks to reporters sent a message to the House leadership: Go beyond what the Senate passed and Tuesday’s “great victory will be turned back into nothing.”

Rep. Richard Pombo, R-Calif., a principal sponsor of the House-passed bill, left open the possibility of compromise. He said both chambers agree more offshore oil and gas development is needed “to provide relief for consumers.”

“The only remaining question is just how much relief will Congress grant,” said Pombo.

Republican senators hailed their bill as a major step toward increasing domestic oil and natural gas production.

“It brings more American energy to American consumers,” declared Majority Leader Bill Frist, R-Tenn. With more supply of natural gas, prices may drop, he said.

Domenici called it “welcome news for the people of the United States” — for homeowners facing high heating bills as well as for manufacturers and chemical companies that have seen natural gas costs soar.

Never mind that no oil or gas would flow from the new area for four or five years, perhaps longer.

At best “this will supply a small amount of gas years from now,” said Sen. Mark Dayton, D-Minn., who voted against the bill because GOP leaders maneuvered to bar amendments. Dayton wanted a provision that would expand support for ethanol.

Many of those who opposed the bill — including Sen. Olympia Snowe of Maine, the only Republican to vote no — feared it could lead to oil and gas drilling along the Atlantic and Pacific coasts, now protected by the moratorium.

While 18 Democrats joined Republicans in support of the bill, only Sen. Mary Landrieu, D-La., joined the Republicans at the news conference.

It was her time to bask in the glory and the Democratic leadership wanted it that way.

She had pushed to increase the royalties from offshore oil and gas for four Gulf coast states that have rigs in nearby waters. The bill would give the four states 37.5 percent of future royalties, compared to less than 2 percent today — a huge windfall for Louisiana.

Louisiana would receive $600 million a year 10 years from now and more in later years, compared to about $30 million to $40 million a year under current rules, according to Landrieu’s staff.

Eventually the four states could share as much as $12 billion to $15 billion a year under the bill, according to an analysis by Sen. Jeff Bingaman, D-N.M., who opposed the royalty changes.

Senate Democratic leader Harry Reid’s support for the bill was said to be largely to help Landreiu take something back to Louisiana voters and get re-elected in 2008, when her fate may determine whether Democrats regain a Senate majority.