2. OFFSHORE DRILLING:

Revenue-sharing remains key issue in spill bill negotiations

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Senate Energy and Natural Resources Chairman Jeff Bingaman's oil spill-response bill still faces a bumpy ride through the committee and the full Senate despite ranking member Lisa Murkowski's signing on to a modified version of the measure last week.

Bingaman (D-N.M.) and Murkowski (R-Alaska) last week circulated new offshore drilling safety language to replace legislative text in a bill (S. 917) Bingaman introduced by himself earlier this year.

Murkowski had previously refused to sign on to the measure, which comes in response to last year's BP PLC oil spill in the Gulf of Mexico, because of provisions in the original text that she said would have prioritized environmental safety at the expense of energy production. That language is not included in the new amendment language.

She had also argued for the proposal to include a provision that would dedicate a portion of the revenue from offshore oil and gas leases to coastal states. "We need to address them together, and if we don't, I doubt it will succeed in reaching the president's desk," Murkowski said during a hearing on the measure last month (Greenwire, May 17).

But that language is also absent from the new text. Murkowski yesterday brushed off questions about its absence.

"It's not as if we got an agreement that we're not going to see revenue-sharing," Murkowski said.

But its absence could lock out otherwise shoo-in votes for the measure, like Louisiana Democratic Sen. Mary Landrieu, who has vowed that she won't support a drilling bill without a revenue-sharing provision.

"I don't really think anything is going to pass without the revenue-sharing provision," Landrieu said last month (E&ENews PM, May 10).

Yesterday, she reiterated her pledge to offer up a revenue-sharing amendment when the committee marks up the legislation. But it remains uncertain when that will happen.

The panel has scheduled its next markup for the second week of July, but it remains unclear whether the drilling-safety bill will make it on the agenda. The committee has a handful of other measures ready for markup, some of them less controversial.

"We haven't ordered them yet," Murkowski told reporters in the Capitol yesterday afternoon. "We've just kind of agreed in concept that let's start with the less controversial ones."

For his part, Bingaman yesterday offered few clues as to how the revenue-sharing negotiations were going. "I haven't made a judgment as to what we're going to try to work out," he said.

Reporters Elana Schor and Jean Chemnick contributed.