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CongressNow: ‘Oil Patch’ Democrats Push Drilling Plan

No one knows yet how the contentious question of offshore drilling will be addressed when the 110th Congress returns to work in September. But during this summer of record-high gasoline prices, key Democrats — especially Speaker Nancy Pelosi (Calif.), Senate Majority Leader Harry Reid (Nev.) and presumptive presidential nominee Sen. Barack Obama (Ill.) — have begun to open the door to expanding domestic drilling, an approach that until recently was heretical within Democratic circles because of decades of strong opposition by environmentalists.

Accelerating this switch has been a bloc of perhaps two dozen House Democrats who, along with a half-dozen Democratic Senators, have leveraged public opinion in hopes of nudging their leaders toward the Republican position of lifting barriers to offshore drilling. Some of these Democrats are “oil patch” lawmakers who come from petroleum-rich regions such as Texas and Louisiana; others represent conservative, inland districts where constituents see little benefit, and much to lose, by not drilling offshore.

For many of these lawmakers, crossing their constituents by blocking an expansion of drilling would endanger their re-election prospects. And this gives them leverage with a leadership that is on the verge of gaining more than a dozen House seats this fall — as long as Democratic incumbents can hold their own on Election Day.

“Quite frankly, the Republicans have a good political issue on drilling, and they happen to be right,” said former Rep. Charlie Stenholm (D-Texas), a conservative Blue Dog Democrat whose lobbying clients include the American Petroleum Institute as well as agricultural interests with a stake in biofuels. The Democratic leaders’ initial opposition to expanding drilling, Stenholm said, was causing “real consternation among the Blue Dogs.”

Rep. Jim Costa (D-Calif.), who helped draft a bipartisan House energy bill and is the chairman of the House Natural Resources Subcommittee on Energy and Mineral Resources, added that “the leadership is always cognizant of the diversity within our own Caucus. What we’re trying to do is represent our district, and the leadership clearly understands that.”

The skirmishing over gasoline prices generally — and over drilling specifically — dominated Congress in July and into the August recess. Facing a difficult election year, Republicans eagerly ran with the issue, noting that polls showed the public more likely to share its view than that of environmentalists. Even environmentalists privately acknowledge that they have lost serious ground on the issue.

Indeed, during the recess — as Republicans were blasting Democrats from a closed House chamber for leaving town without passing an energy plan — leading Democrats have begun to come around. They now say that drilling, regardless of whether it’s their personal preference, needs to at least get a vote in Congress, especially if it is included in a grand compromise along with “sweeteners” such as funding and tax breaks for renewable energy and consumer assistance to cope with high energy prices.

In August, Obama said he was “willing to consider” an energy plan that includes drilling, while Pelosi told CNN’s “Larry King Live” that she was willing to hold a vote on a package that included drilling, so long as it included other policies that Democratic leaders favor, such as a release of oil from the Strategic Petroleum Reserve.

Later, Reid, on a teleconference call with oilman-turned-wind-power-advocate T. Boone Pickens, said that his chamber will likely hold a vote on expanded drilling in September, possibly alongside an extension of renewable energy tax credits that are set to expire this year. And Democratic convention keynote speaker Mark Warner, the former Virginia Governor who’s running for a vacant Senate seat, told Bloomberg News that he supported passage of drilling provisions as long as the bill also boosts renewable energy.

Public pressure is likely the primary driver of such shifts.

“This is Realism 101 — there’s nothing like the American public to bring the leadership around,” said former Senate Energy and Natural Resources Chairman Bennett Johnston (D-La.), whose lobbying clients after leaving Congress have included a range of oil and gas interests.

Still, the coordinated efforts of pro- extraction Democrats in both chambers — which peaked just before the recess with the announcement of a bipartisan bill in the House and a bipartisan blueprint in the Senate — also played a role in crystallizing Democratic leaders’ movement, say those who have followed the debate.

In the Senate, a bipartisan “Gang of 10” proposal would expand oil and gas drilling in certain zones in the Gulf of Mexico, while allowing states along the South Atlantic coast to opt in to drilling beyond a protective band 50 miles offshore. The bill would also squeeze oil companies and plow the revenues into alternative energy, as well as giving tax breaks for renewables and boosting coal-to-liquids and nuclear plants, two sources of energy that are controversial among environmentalists.

Democratic Senators in the “gang” include Kent Conrad (N.D.), Mary Landrieu (La.), Blanche Lincoln (Ark.), Ben Nelson (Neb.) and Mark Pryor (Ark.) — all of them key building blocks of a 60-vote coalition required to end debate and proceed to consideration of a bill.

This week, Democratic Sens. Tim Johnson (S.D.), Tom Carper (Del.) and Ken Salazar (Colo.) joined the group, as did Republican Sens. Norm Coleman (Minn.) and John Sununu (N.H.).

In the House, Reps. Neil Abercrombie (D-Hawaii) and John Peterson (R-Pa.) have offered legislation that would allow drilling beyond a 25-mile barrier if states consent and beyond 50 miles if they do not. It would also fund alternative energy and low-income heating programs. Nearly 30 Democrats have signed on.

The Democrats who signed on as original co-sponsors include several from oil-producing regions, such as Costa, Reps. Dan Boren (Okla.), Don Cazayoux (La.), Charlie Melancon (La.), Gene Taylor (Miss.), Henry Cuellar (Texas), Gene Green (Texas), Nick Lampson (Texas) and Solomon Ortiz (Texas). Others are from Republican-leaning territory, including Reps. Jason Altmire, Tim Holden, Paul Kanjorski and Patrick Murphy of Pennsylvania; Reps. John Barrow, Sanford Bishop and Jim Marshall of Georgia; and Reps. Nancy Boyda (Kan.), Lincoln Davis (Tenn.), Joe Donnelly (Ind.), Bill Foster (Ill.), Stephanie Herseth Sandlin (S.D.) and Mike McIntyre (N.C.).

Key players, including Abercrombie, Peterson and Costa, met for about six weeks before the August recess, pulling in other interested lawmakers and aides from time to time, though without the presence of representatives of interest groups, Costa said.

“This effort really marked the frustration that Members of both parties had about the partisan overtones,” he said. “It couldn’t be a Democratic bill or a Republican bill — that was the ground rule we established.”

Costa said he’s cautiously optimistic about the signals Democratic leaders are sending on drilling. While a Democratic leadership aide speculated that the Abercrombie-Peterson bill may not end up being acceptable to party leaders in its present form, the aide added that some form of compromise legislation could emerge and be voted on before the end of the session, rather than waiting until a new Congress and president are sworn in.

Pelosi has brought pro-drilling Democrats “into leadership meetings, to demonstrate that the Caucus can be for increased production, and to recognize that oil has to be part of the process of transitioning” to an energy economy based on renewables, the aide said.

Any action this year faces important hurdles, from the politicization of the election year to the limited Congressional legislative calendar to the opposition of key interest groups. For instance, the American Petroleum Institute has urged Senators to oppose the Gang of 10 plan, saying it does not go far enough in easing drilling restrictions and would hamper investment by removing existing tax breaks.

The National Petrochemical & Refiners Association and the American Trucking Associations have expressed support for the House bill, as have the National Association of Manufacturers, the American Chemistry Council and the U.S. Chamber of Commerce.

Meanwhile, key environmental groups continue to pressure Pelosi not to cave in to drilling.

“In our view, there’s already a lot of drilling, and more could be done where the oil companies already have leases,” said Tiernan Sittenfeld, the legislative director for the League of Conservation Voters, echoing a Democratic leadership proposal to force oil companies to “use or lose” leases they already have for drilling. A version of that measure failed to pass in July when 11 Democrats joined Republicans to deprive the measure of the needed two-thirds to approve it under suspension of the rules.

However, one factor that could argue in favor of action this year is the possibility that the Democrats could increase their majority in both chambers as Obama wins the presidency. Fear of that could convince pro-drilling forces to take a less-than-ideal offer now rather than what Johnston called a “more extortionate” tax plan next year, such as the one floated by Obama.

However the battle develops this fall, Peterson said, “the party that convinces Americans that they will supply them with affordable, available energy is the party that will rule.”