Rahall eyes addition to climate bill but leadership uncertain

House Natural Resources Chairman Nick Rahall (D-W.Va.) hopes to add a major oil and gas title to the Democratic energy and climate bill, but it remains unclear whether he will get the chance as House leaders aim to speed the bill's progress.

Rahall's staff last month circulated draft legislation that would raise onshore royalty rates, end the royalty-in-kind program, overhaul planning and regulation for onshore and outer continental shelf energy development, and impose a series of ethics reforms, among other features.

"I'd prefer to have it attached to the climate bill, because when we're talking about energy, it should be in a comprehensive piece of legislation," Rahall told E&E yesterday. "Now is the time to do it, in a nonpolitical season without the emotions attached thereto, and at a time when the price of the pump is relatively low compared to where it was when we heard 'Drill, baby, drill,'" he added.

But the path forward for the proposal is uncertain. The bill has not yet been formally introduced, and Rahall said it is being prepared so that "if asked to include it as part of climate change, we'll be ready rather than go through a crammed session to get it ready."

House Speaker Nancy Pelosi (D-Calif.) yesterday said she wants committees to act by June 19, and floor debate could begin by the end of this month (E&ENews PM, June 3). A Democratic leadership aide said there has not been a decision on whether Rahall's plan will be part of the larger energy and climate bill.


Asked if the bill would be ready before the deadline, Rahall replied: "Yes, or if not, we'll be ready to go with it at the proper time and with the request of the leadership."

The bill would require a far-reaching reorganization of the Interior Department.

The draft would consolidate all energy and mineral leasing programs currently in the Bureau of Land Management and Minerals Management Service into one agency in Interior that would handle lease sales, inspection, enforcement and revenue collection for traditional and renewable energy. The agency would be called the Office of Federal Energy and Minerals Leasing.

Interior Secretary Ken Salazar said the measure is under review.

"We also have our own thoughts about organization within the department," he said yesterday. "We are in the process of developing what our position will be relative to MMS and the BLM and how we move forward with leasing of our public lands both onshore and offshore. And also taking a look at how we collect revenues, both onshore and offshore."

The draft measure also aims to improve planning, creating new outer continental shelf "regional planning councils" as well as joint BLM and Forest Service efforts to work with states planning for both renewable and traditional energy development. There are also some renewable energy-specific provisions addressing public lands leasing for wind and solar projects.

Other provisions include new "diligent development" rules for onshore and offshore petroleum leases, new fees on nonproducing leases, and shorter lease terms for onshore leases. Rahall and some other top Democrats have argued that the oil and gas industry has done too little to bring existing leases into production even while seeking access to new areas.

Environmental groups have mixed feelings about the measure.

A Wilderness Society official said last month that the group worries a new "super leasing" office within Interior could place undue emphasis on energy development, while the Sierra Club's Athan Manuel said the bill should include new protections following the expiration of decades-old offshore leasing moratoria last year. But they also praised some provisions (Greenwire, May 27).

The oil industry quickly attacked the draft last month, alleging it would stymie investment and development of domestic resources.

A key member of Rahall's committee was noncommittal about the draft plan. Rep. Jim Costa (D-Calif.), who chairs the Energy and Mineral Resources Subcommittee, said there is clearly a need for reform within MMS. The agency has been plagued by scandal in recent years and Salazar has said addressing the issue is a priority.

Costa also said the bill "fits in context" with larger efforts to overhaul energy policy under way in the House and Senate.

But Costa said he wants to get a clearer understanding of the intent behind consolidating the BLM and MMS energy programs under the Office of Federal Energy and Minerals Leasing the bill would create. Costa also said he was concerned that raising royalty rates could harm natural gas development.

Reporters Noelle Straub and Eric Bontrager contributed.

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