OFFSHORE DRILLING:

Senate panel's drilling endorsement creates wild card on floor

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The Energy and Natural Resources Committee's vote to allow wider oil and gas leasing in the eastern Gulf of Mexico yesterday creates a new wrinkle in efforts to pass a comprehensive energy and climate change bill through the full Senate.

The panel voted 13-10 to accept Sen. Byron Dorgan's (D-N.D.) plan to allow leasing as close as 45 miles off Florida's gulf shores and much closer in a gas-rich area called Destin Dome.

Senators yesterday disagreed about whether this would help or hurt floor chances for the broad-based energy bill the committee plans to wrap up tomorrow. Senate Majority Leader Harry Reid (D-Nev.) hopes to bring a combined energy and climate bill to the Senate floor this fall.

Committee member Maria Cantwell (D-Wash.), an opponent of wider leasing, said the drilling provision would be a "poison pill" on the floor. And Sen. Robert Menendez (D-N.J.), another opponent, said the leasing plan and the earlier weakening of the renewable power mandate was tempering his support for the bill. "It continues to move in the direction that I find very difficult to support," he said.

The plan also drew immediate attacks from Sen. Bill Nelson (D-Fla.), because it upends a 2006 compromise that expanded gulf leasing but generally provides Florida with a 125-235 mile no-drilling buffer until mid-2022, although it is 100 miles in the panhandle region that extends into the gulf's "central" planning area.

Nelson vowed efforts to block the energy bill over the issue. "We will have a bunch of senators filibuster this if we have to to protect the interests of the United States military," he told reporters.

Environmental groups are also ready for a fight. "It's a poison pill that will not lower the price at the pump; but it will put important energy legislation at risk. And if it manages to pass, it will complicate our efforts to deal with climate change," said Jackie Savitz, senior campaign manager with the group Oceana, in a statement.

Sierra Club lobbyist Athan Manuel said the group would push to strike the provision or at least widen Florida's no-drilling buffer. "We knew this was kind of a tough committee for us when it comes to drilling," he said.

But Sen. Ben Nelson (D-Neb.), who has endorsed wider domestic drilling, said the addition could help the bill. "Anything that makes it more comprehensive certainly makes it more likely to get support," he said. Asked if it could bring more Republican votes, he replied "it has got a better chance than if there is no drilling amendment."

Paul Bledsoe, a spokesman for the National Commission on Energy Policy, agreed. "In most negotiations, more elements on the table means a bigger party at the table," he said. "If you are going to get 60 votes, you need as many items in play as possible."

Several lawmakers on the committee that an E&E analysis has identified as "fence sitters" on climate legislation voted for the amendment yesterday -- they include moderate-to-conservative Democrats like Dorgan, Blanche Lincoln of Arkansas, Tim Johnson of South Dakota, and Debbie Stabenow of Michigan, as well as GOP Sen. Bob Corker of Tennessee.

The Independent Petroleum Association of America and American Petroleum Institute praised the measure. "In the eastern gulf, we're talking about an area with trillions of cubic feet of American gas, and potentially billions of barrels of American oil," Barry Russell, IPAA's president and CEO, said in a statement. "And the best part is: Every bit of it resides in areas in proximity to existing pipelines and needed infrastructure."

But one petroleum industry lobbyist cautioned that if a merged energy and climate bill is brought to the floor, the addition of the drilling language would not come close to counterbalancing industry concerns with a cap-and-trade plan.

Revenue sharing

The defeat of a separate amendment from Landrieu providing coastal states a big cut of revenues from oil and gas development on the outer continental shelf could weaken support from some lawmakers.

Louisiana, Texas, Mississippi and Alabama won revenue-sharing under a 2006 law, and Landrieu yesterday unsuccessfully offered an amendment to expand it to other states as an incentive to push for OCS leasing.

The failure of that plan sapped some support from Dorgan's amendment from two of the oil and gas industry's chief allies. Landrieu voted against Dorgan's plan, as did Sen. Lisa Murkowski (R-Alaska), along with several other pro-drilling senators who joined opponents of wider leasing like Menendez and Cantwell in their failed opposition to Dorgan's plan.

The 10 "no" votes were: Cantwell, Menendez, Murkowski, Landrieu, Ron Wyden (D-Ore.), Bernie Sanders (I-Vt.), Richard Burr (R-N.C.), John McCain (R-Ariz.), Bob Bennett (R-Utah.) and Jeff Sessions (R-Ala.).

The 13 votes for the Dorgan amendment in committee were Dorgan, Stabenow, Lincoln, Johnson, Corker, Chairman Jeff Bingaman (D-N.M.), Evan Bayh (D-Ind.), Mark Udall (D-Colo.), Jeanne Shaheen (D-N.H.), John Barrasso (R-Wyo.), Sam Brownback (R-Kan.), Jim Risch (R-Idaho), and Jim Bunning (R-Ky.).

Click here to read the amendment.

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