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Offshore Drilling Key to Senate Energy Debate

If you are one of the countless Senate watchers who is disappointed by all the rosy predictions about the ease with which energy policy legislation is expected to pass, your love of filibusters could be quenched if Sen. Bill Nelson (D-Fla.) follows through on a threat to slow down, if not completely block, the bill.

Energy and Natural Resources Chairman Pete Domenici (R-N.M.) may have successfully avoided the traditional Senate land mines, opening Alaska’s Arctic National Wildlife Refuge to oil exploration and giving the makers of the gasoline additive methyl tertiary-butyl ether immunity from lawsuits, but it looks like Nelson is going to try to turn the issue of offshore oil and natural gas drilling into this year’s ANWR and MTBE.[IMGCAP(1)]

Domenici acknowledged the debate over how to ensure that Louisiana gets more money from it’s current offshore oil rigs, while protecting Florida and other states with moratoria on offshore drilling is a “very hot, volatile” issue.

Although Nelson and Sen. Mel Martinez (R-Fla.) — along with other opponents of allowing energy companies to drill off their states’ coasts — have been working to craft a compromise with offshore drilling proponent Sen. Mary Landrieu (D-La.), Nelson spokesman Dan McLaughlin said Friday that Nelson is ready “to grind the doggone place to a halt.”

That could mean forcing votes to end debate on unrelated amendments and employing other procedural tie-ups in an attempt to slow down the bill, McLaughlin said. By objecting to unanimous consent requests to vote on amendments, Nelson could force a protracted debate on even the most innocuous of proposals, which, in turn, could thwart Senate Majority Leader Bill Frist’s (R-Tenn.) plan to push for final passage by the end of next week.

And Nelson won’t necessarily be alone. McLaughlin said Nelson expects to have support from a bipartisan group of coastal state Senators. That could include Sens. Barbara Boxer (D-Calif.), Dianne Feinstein (D-Calif.), Elizabeth Dole (R-N.C.), Olympia Snowe (R-Maine), Susan Collins (R-Maine), Jon Corzine (D-N.J.), Maria Cantwell (D-Wash.) and others.

Because of the potential for disaster, Frist and Senate Minority Leader Harry Reid (D-Nev.), along with Domenici and Senate Energy and Natural Resources ranking member Jeff Bingaman (D-N.M.), are monitoring and participating in negotiations.

“We’re trying to see if there’s a way to do additional drilling in the Gulf and do it in a way that a majority can support,” said Bingaman. It is still unclear exactly where the votes will fall given the regional, rather than partisan, nature of the issue.

Still, Landrieu said she is committed to finding a resolution.

“Sen. Nelson has been a very strong and effective advocate for his state on not expanding drilling … but Louisiana has a desperate situation,” Landrieu said last week. “It’s going to take a little give and take on the Senate floor.”

Landrieu doesn’t expect to have a deal on offshore drilling until at least next week, said spokesman Adam Sharp.

Already, the energy bill includes a provision that would require the government to create an “inventory” of all the potential oil and natural gas resources off the coasts of the United States. However, Landrieu is also pushing an amendment that would redraw her state’s water boundaries to include more of the Gulf of Mexico as well as require the federal government to give more offshore drilling royalties to states that allow such activity.

Landrieu wants more territory and more money in order to help the state pay for coastal erosion that is partly caused by offshore drilling activities. Currently, drilling off Louisiana’s coast accounts for nearly 80 percent of the nearly $5 billion in royalties that flow to the federal treasury each year, she said.

“All we’re asking for is a few hundred million of that pot,” said Landrieu. “It’s never been my intention to incentivize drilling [off other states]. It has been my intent to recognize the contribution that states like Louisiana have made to not just our economic security but also our national security.”

A similar provision to increase payments to states that allow offshore drilling is included in the House-passed version of the energy bill, but it faces opposition from House GOP conservatives, who say it will create a new entitlement spending program. Other states with offshore rigs include Mississippi, Alabama, Texas and Alaska.

Nelson and other opponents of Landrieu’s approach fear that redrawing the water boundaries would not only bring drilling closer to the coast of Florida, but also cause a ripple effect that could hurt other states not on the Gulf of Mexico.

For example, Snowe spokeswoman Antonia Ferrier noted that the Maine Senator is concerned about the effect offshore oil drilling could have on the state’s all-important fishing industry. Snowe, along with other opponents of Landrieu’s plan, is also opposed to the “inventory” provision already in the bill, and an amendment to strike the language is expected on the Senate floor.

Because Florida’s economy depends heavily on tourism, Nelson is concerned that the closer offshore oil drilling is to the state’s beaches, the more likely it is that a catastrophic oil spill could devastate a state that nearly 70 million people visit each year. McLaughlin noted that the Gulf of Mexico has more oil spills, primarily from tanker ships, than any other place in the world.

“We’re talking about tanker traffic increasing exponentially off the coast of Florida,” said McLaughlin. “There is no justification for the irresponsibility of exposing the state of Florida to such an accident.”

Besides the filibuster route, Nelson may also have the option of bringing a budget point of order against the Landrieu offshore drilling amendment. Two-thirds of the Senate is needed to beat back a budget point of order, a hurdle Landrieu may not be able to clear.

Landrieu is currently trying to decide whether to have the Congressional Budget Office estimate the price of her amendment. It seems their score of the amendment would exceed budget caps, largely because the assumptions they make would count potential costs from unused and inactive drilling leases in the Gulf of Mexico, said Landrieu’s Sharp.

“There’s a question about whether those assumptions are accurate,” he said.

Without a CBO cost estimate, the amendment would still be subject to a budget point of order.

Landrieu could write her amendment outside of the five-year budget window, which would not be subject to a budget point of order. However, Sharp acknowledged that that tactic could cost her support among budget hawks.

Despite the potential drama involving offshore drilling, partisan and regional concerns over this year’s bill are minimal compared to the last Senate energy bill, which was filibustered in 2003 by a majority of Democrats and a handful of Northeastern Republicans.

“It’s better than it was. The fact that the Senate bill doesn’t have MTBE in it is a serious improvement over last time,” noted Snowe spokesman Ferrier. She added that Northeastern Republicans have less to dislike this time around, given changes Domenici made to provisions on the electric grid and expected tax breaks that tilt more toward conservation rather than fossil fuel production.

Beyond the offshore oil issue, Snowe has teamed with Feinstein in opposition to language in the bill that they say would give the Federal Energy Regulatory Commission too much authority over where to put liquefied natural gas terminals in the United States. Currently, states and localities have considerable latitude to approve or reject the sites, in which the liquefied gas is returned to its gaseous state. The bill would give FERC more say so on the issue.

Meanwhile, several “usual suspect” amendments are expected, including a Sen. John McCain (R-Ariz.) proposal to lessen the effects of “greenhouse gases” on global climate change. But Domenici said he doesn’t expect debate on that amendment to stall the bill.

Similarly, Bingaman plans to offer or co-sponsor a number of amendments that would encourage companies to use and develop more renewable fuels and energy sources, while other Senators are expected to try to force carmakers to increase the fuel efficiency of their vehicles.

Even if those types of amendments prevail, however, they are likely to be stricken in any House-Senate conference committee.

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