OIL AND GAS:

Senate energy bill may include broad OCS assessment

Senate energy legislation may require a major new assessment of offshore energy resources that would encompass fossil fuels and potential for alternative energy such as wind and wave power, sources on and off Capitol Hill say.

The Senate Energy and Natural Resources Committee tentatively plans to mark up oil and gas provisions of a major energy bill the week of May 18.

The oil and gas section of the bill has received less attention to date compared to provisions on renewable electricity, transmission, clean energy financing and other issues. Committee leaders have not yet unveiled a draft of the oil and gas section.

But Robert Dillon, a spokesman for ranking member Lisa Murkowski (R-Alaska), said lawmakers are eyeing ways to update assessments of energy potential on the outer continental shelf (OCS). "It is renewables too," he said.

An environmental lobbyist tracking the bill also said the committee plans to seek an OCS assessment that would explore energy, and a range of other issues, such as coastal economies and recreation.

A spokesman for Chairman Jeff Bingaman (D-N.M.) said oil and gas provisions are under development but declined comment when asked about inclusion of an inventory provision.

Bingaman has previously said that a better assessment of offshore oil and gas potential should occur in order to make informed decisions about future leasing policy (Greenwire, Nov. 17, 2008).

Seismic data for the Atlantic Coast is more than two decades old. A new inventory was required in the Energy Policy Act of 2005 but has not been funded. It is not clear how the committee might address the issue, because actual spending decisions are left up to the Appropriations Committee, although the Energy Committee can authorize funding levels.

Murkowski, in a January interview, said she and Bingaman had discussed the inventory issue in conversations about their planned energy bill.

The Interior Department highlighted data gaps on many offshore energy and environmental issues in an April assessment of existing information.

Interior Secretary Ken Salazar ordered the assessment as part of his review of OCS energy policy, which is in flux following the expiration of longstanding East and West Coast oil and gas leasing bans last year.

The Bush administration, right before leaving office, issued a draft OCS plan that would greatly expand leasing. Salazar is reviewing that plan and is not expected to support a major widening of OCS leasing. But he has suggested the administration is open to some oil and gas expansion as part of a broader energy policy.

While new OCS assessments could be an area of partisan agreement, many Republicans also want to move quickly to open up more areas for drilling, rather than waiting on new data collection.

Indeed the inclusion of oil and gas provisions in the bill opens the door for amendments on wider drilling -- an issue that dominated Capitol Hill energy debates during the 2008 election season marked by high oil and gasoline prices. With prices at the pump much lower that last summer's $4-per-gallon levels, the issue has been more muted.

Murkowski said there could be amendments on leasing. "We are still talking with members on our side to determine what they may want to advance," she said Wednesday. "There is a great deal of interest in what is happening on the OCS and our opportunities there."

The nationwide average regular gasoline price hit a peak of $4.11 per gallon in mid-July of last year, but with the bad economy sapping demand, prices are now far lower. The monthly average gasoline price is expected to peak at about $2.30 per gallon late this summer, according to a mid-April forecast by the Energy Information Administration.