ENERGY POLICY:

Senate markup may herald return of offshore drilling debate

The Senate Energy and Natural Resources Committee plans to complete marking up a broad energy bill this week with a session that will include debate over an oil and gas title that Republicans hope to amend with language expanding domestic leasing.

The markup is scheduled for tomorrow but may extend later into the week, said Bill Wicker, a spokesman for Chairman Jeff Bingaman (D-N.M.), as lawmakers won't see the full list of proposed amendments until today.

The most contentious issue this week will likely be the draft oil and gas title Bingaman unveiled last week.

Robert Dillon, a spokesman for ranking member Lisa Murkowski (R-Alaska), said Friday that Republicans will be "looking for ways to increase production of traditional oil and gas. We are going to need to revive the economy and keep prices stable when demand returns."

He did not provide specifics on any amendments but said some would likely be related to offshore production and others to onshore development. "Republicans are looking for ways to increase production that can be agreed to by a majority of the committee," Dillon said.

While handicapping the debate is impossible absent specific proposals, some committee Democrats favor an expansion of OCS leasing.

Sen. Byron Dorgan (D-N.D.) introduced energy legislation with Sen. George Voinovich (R-Ohio) this year that blends expanding leasing in the eastern Gulf of Mexico with many other provisions on areas such as improving transmission and deployment of plug-in electric vehicles and infrastructure. Sen. Mary Landrieu (D-La.), meanwhile, is a strong oil and gas industry ally who favors wider leasing.

The underlying draft oil and gas title aims to implement and broaden an inventory of offshore resources, extend an onshore permit streamlining program launched under the Energy Policy Act of 2005, and make the head of the Minerals Management Service -- which regulates offshore energy -- a Senate-confirmed position (Greenwire, June 4).

Other aspects include increasing federal loan guarantees available for building the long-sought Alaska natural gas pipeline to $30 billion, rather than the $18 billion allowed in 2004's Alaska Natural Gas Pipeline Act, and allows the Federal Financing Bank to capitalize the project; and giving the Interior Department a green light to issue a right of way for building part of a separate in-state line along a stretch of highway in Denali National Park.

It would also create an Alaska outer continental shelf leasing and permitting office; and facilitate co-production of geothermal energy at oil and gas sites.

Carbon sequestration, renewables provisions on tap

The markup slated for tomorrow will also consider draft titles on carbon sequestration; energy market transparency; public lands renewable energy development; helping to reduce fossil fuel use while boosting non-fossil sources and efficiency on the island territories including Puerto Rico and Guam; and finally a title on resource assessments for helium and potash and improving federal energy policy planning.

Also, the committee still has to dispatch with one last amendment to the renewable electricity standard before it can tackle oil and gas and other provisions. Members got through all of the more than 20 RES amendments at last week's markup except an amendment from Sen. Evan Bayh (D-Ind.) that would let each state control its "alternative compliance payments" instead of their money going to the Federal Treasury.

The RES requires utilities to use renewable energy to produce 15 percent of its electricity by 2021, but roughly a fourth of the requirement may be met through energy efficiency measures. If the utilities are not able to meet the standard by directly producing the electricity, they may buy renewable energy credits from other entities producing renewable energy electricity or pay a 2.1 cent per-kilowatt-hour "alternative compliance payment," under the measure.

This week's markup should cap a lengthy, multiweek process to assemble the broad-based bill that includes a suite of other provisions on areas such as overhauling federal financing for low-emissions energy projects, transmission siting, industrial energy efficiency, energy work force development and many other topics.

Across Capitol Hill, the House Energy and Commerce Committee last month approved a sweeping bill that pairs a cap-and-trade program to cut greenhouse gas emissions with energy provisions such as a renewable electricity standard. House Democratic leaders want to bring the measure to the floor this summer.

The Senate Environment and Public Works Committee has not yet taken up a cap-and-trade plan. Senate Majority Leader Harry Reid (D-Nev.) hopes to bring a combined climate and energy package to the floor this fall, spokesman Jim Manley said Friday.

Click here to read the Senate energy bill provisions completed to date.

Schedule: The markup is tomorrow at 10 a.m. in 366 Dirksen.

Reporter Katherine Ling contributed.

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