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OCS Legislation Faces 'Even More Difficult' Challenge Due to Capitol Hill Turmoil

Citing the continuing fallout from the Jack Abramoff lobbying scandal, the shake-up in the House leadership, the extreme partisan atmosphere on Capitol Hill and the mid-term elections later this year, natural gas industry and Capitol Hill officials believe it will be extremely challenging during the second session of the 109th Congress to get legislation passed that would expand access to onshore and offshore energy supplies.

Removing the moratoria on oil and gas drilling on the Outer Continental Shelf (OCS) "is high on the list of energy issues that will be addressed in this second session, but I don't see that it's gotten any easier" than in the first session, Bill Wicker, a spokesman for the Democratic side of the Senate Energy and Natural Resources Committee, said last Wednesday.

He noted that several key Senate lawmakers -- committee Chairman Pete Domenici (R-NM); Sen. Jeff Bingaman of New Mexico, the ranking Democrat on the Senate energy panel; Sen. Mark Pryor (D-AR) and Sen. John Warner (R-VA) -- are eager to revisit the OCS issue this year, but "whether they can get [legislation] across the finish line, we'll have to wait and see." Domenici is particularly interested in pursuing increased access to the gas-prone Lease Sale 181 area in the eastern Gulf of Mexico.

Wicker conceded that passing legislation on expanded OCS leasing and drilling in the Arctic National Wildlife Refuge will be "even more difficult" in 2006 due to the mid-term elections, although not impossible.

"I think [energy trade] groups that support additional access are potentially facing more of an uphill battle" this year due to the tumult in the House, the widening lobbying scandal and mid-term elections, said Mark Stultz, a spokesman for the Natural Gas Supply Association (NGSA), which represents major natural gas producers.

"It has created a sense of turmoil in terms of [Congress's] priorities and agenda," he told NGI. As a result, "it's going to be more challenging" to pass a bill in 2006 that would open up more of the OCS, "but that doesn't [mean] it's impossible," Stultz said.

With much of the upheaval limited to the House, "it may be the efforts [to open the OCS] will be on the Senate side" in the initial months of the second session, he said. Stultz noted that Pryor and Warner are planning to introduce legislation early on that would allow coastal states to opt out of the moratorium for deepwater production, and would provide a revenue-sharing incentive for the states.

On the House side, carry-over legislation from 2005 will include Rep. John Peterson's (R-PA) bill to completely do way with the moratoria on OCS drilling, and Rep. Richard Pombo's (R-CA) measure giving individual coastal states the opportunity to opt out of the drilling ban. Peterson's bill reportedly now has 120 sponsors, Stultz said.

Despite a "number of distractions" on Capitol Hill, "I think there is clearly still a significant effort to try and look at the offshore issue" in 2006, said Dan Naatz, vice president of federal resources for the Independent Petroleum Association of America, which represents independent oil and gas producers.

"I'm not saying it will be easy, but certainly I think we're still seeing a very robust effort on industry's part" to push for expanded OCS activity and other land access issues in Congress this year, he told NGI. "On the Hill side, from the committees we've talked to, everybody's still interested" in these energy issues.

"We hope so," Naatz said when asked whether he thought OCS legislation would clear Congress in 2006. "I've been around this town for too long to say 'yes' or 'no.'" But he acknowledged "it's going to be a steep hill to climb."

Energy trade groups downplayed the impact that the unfolding lobbying scandal would have on their activities. "I doubt it seriously will change the way we advocate our [energy] positions," said NGSA's Stultz. "We don't see ourselves as a money player. We see ourselves as an idea advocate."

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