Revenue impasse endures, despite Atlantic announcement

By Geof Koss | 03/16/2016 07:12 AM EDT

Key lawmakers signaled yesterday that the Interior Department’s decision not to allow oil and gas leasing off the Atlantic Coast for the foreseeable future is having little effect on a controversial amendment that would expand the sharing of federal offshore revenues with state governments — an issue that is holding up the Senate energy bill.

Proponents of the amendment sponsored by two Republican senators from Louisiana, Bill Cassidy and David Vitter, had hoped that the Bureau of Ocean Energy Management’s reversal yesterday on allowing leasing in Atlantic waters from 2017 to 2022 would ease the bill’s path (Greenwire, March 15). Specifically, they hoped Sen. Bill Nelson (D-Fla.) would drop his opposition to an agreement that would set up votes on about three-dozen amendments to the energy legislation (S. 2012) and an aid package for Flint, Mich.

"I’m stunned that Senator Nelson would think that it’s smart business to be the last man standing between a resolution for the people of Flint and an energy bill," Senate Energy and Natural Resources Chairwoman Lisa Murkowski (R-Alaska) said yesterday, noting that a competing amendment by Sen. Ed Markey (D-Mass.) to eliminate revenue-sharing in the Gulf of Mexico is also in the queue. "You’d like to think that this [Interior] announcement would relieve some of the concerns that he has."


She added that getting the 60 votes needed to pass the Cassidy-Vitter amendment is "a heavy lift."

Noting that his amendment does not open any areas to leasing, Cassidy was more blunt about the Florida Democrat, a longtime opponent of offshore drilling who fears that increasing state shares of drilling revenue will eventually lead to rigs off his state’s coasts.

"It makes Nelson’s objections that much more stupid," Cassidy told E&E Daily yesterday. "This doesn’t affect Florida — this even more clearly means it doesn’t affect Florida. So now he doesn’t even have to read the bill. Now he can just look at the lease plan and feel reassured."

But Nelson isn’t backing down from his opposition, citing a recent U.S. Government Accountability Office report that raised red flags over the safety of offshore drilling (E&ENews PM, March 11). "It bolsters my argument against Cassidy," he told E&E Daily yesterday.

Nelson repeatedly cited the GAO report in a floor speech defending his opposition to drilling.

"It’s been nearly six years since we faced one of the greatest natural disasters that our country has ever seen — that was the Gulf oil spill," he said on the floor yesterday afternoon. "And yet, according to the GAO report, we are no better off than we are now than we were before on that tragic accident."

While Nelson’s opposition is a major hurdle to getting an agreement to set up votes on the energy bill and Flint assistance, Sen. Gary Peters (D-Mich.) yesterday noted that discussions also continue with Sen. Mike Lee (R-Utah), who wants changes made to the pay-fors in the $220 million aid package.

Sen. John Thune (R-S.D.) yesterday said it was "becoming increasingly unlikely" that energy and Flint could come up this week.

"We’re still working it, still determined to get it," he told reporters.

Pentagon concerns

While many Democrats are opposed to offshore drilling, one exception — Virginia Sen. Tim Kaine — said yesterday he was surprised by the Defense Department’s concerns that drilling off the state’s coast would affect military training, which he said deviated from the minor issues they’ve raised in the past.

"What I need to understand from them is, if they really have real objections and say this is incompatible with naval operations, that is a huge and important factor," said Kaine, a former governor. "It’s just that I deal with them all the time, I’ve been working on this issue for 10 years, they’ve never suggested a concern to me. So I’m going to have to get them in and talk to them and find out if they changed their position, if so why, what’s the basis for it."

But Kaine, who along with fellow Virginia Democratic Sen. Mark Warner is a co-sponsor of the Cassidy-Vitter amendment, said Interior’s decision would not change his support for the amendment. Both lawmakers say their support for drilling is contingent on the state receiving federal revenues.

"It doesn’t affect my support of the amendment because there needs to be a practice so if this is ever done under any circumstance, Virginia isn’t caught out to dry with no revenue," he said in an interview, adding that the lack of Atlantic leasing for the next five years "makes the vote a little bit theoretical or speculative."

Rep. Mark Sanford (R-S.C.), a former governor of South Carolina, said yesterday that he’s always opposed drilling off the state’s coast, though he initially was open to at least allowing seismic testing. He reversed course when he heard from constituents, he said.

"The district consensus was overwhelming, which was, ‘Why test if you’re never going to explore?’" he said in an interview.

That position "fits" his district, he added. "There’s always been a preservation/environmental ethos to the coast of South Carolina.

"I literally rode my bike on Saturday out along a couple of the barrier islands, and saw ‘Don’t drill S.C.’ in yard sign after yard sign after yard sign," Sanford continued. "Big day and a big win for South Carolina."

Reporter Corbin Hiar contributed.