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House Cancels Tuesday Vote on Eastern Gulf Drilling Bill

The House Republican leadership Tuesday abruptly canceled a scheduled vote on a Senate bill that would open up parts of the eastern Gulf of Mexico to oil and natural gas drilling, pushing back floor action on the measure to later in the week.

"The reason was obvious; we didn't have the votes" to pass the bill under the suspension rules, which required a two-thirds majority, said Chris Tucker, a spokesman for Rep. John Peterson (R-PA), an offshore drilling proponent and co-author of the broad House bill that sought open up a wider swath of the Outer Continental Shelf (OCS) to oil and natural gas leasing.

As one option, he believes House Republican leaders may bring the Senate offshore measure (S. 3711) to the House floor as a stand-alone bill later this week under the regular calendar and closed-rule procedures. This strategy would bar any amendments to the bill, and would require only a simple majority for passage. Another option being considered is attaching S. 3711 to a tax extender bill that may come up for a vote soon, sources said.

"This is not a defeat" in Peterson's eyes, Tucker said.

"We have precious little time left, but remain hopeful that the House will schedule an opportunity for the bill to pass this week," said Sen. Mary Landrieu (D-LA), a drilling advocate and one of the architects of S. 3711.

It's unclear whether there's enough support in the House to pass offshore legislation before Congress adjourns for the year at the end of the week. Some House Democrats are opposed to S. 3711 because of the rule that would bar amendments, while others object to provisions in the bill that would earmark increased offshore revenues for only four Gulf Coast states.

"The Republican leadership's decision to pull the controversial Senate offshore drilling bill from [Tuesday's] schedule only further underscores how little support there remains for the Republican party's...energy policy," said Rep. Edward Markey (D-MA).

"For the bill, S. 3711, to be enacted before the end of the Congress, the House needs to pass it without amendment and avoid a House-Senate conference. If that happens, it would go directly to the president for his signature," said energy analyst Christine Tezak of Stanford Group in an "Energy Bulletin" Tuesday.

"We see two hurdles to passage later in the week," she noted. "Will Speaker-elect Nancy Pelosi (D-CA) change her very anti-drilling tune to vote for this bill? This requires her to abandon the no-drilling position she has always held to vote for a bill the White House desperately wants...The other is whether opponents of the bill will succeed in attaching an amendment that would require leases in the 1990s that lack price triggers for royalty payments to be changed to include them. This could be a tough item to vote against -- who wants to be on the record letting oil companies with record-setting profits have a free ride, even if most have come in to renegotiate?"

Markey is threatening to offer an amendment that would require the renegotiation of the flawed 1998 and 1999 deepwater Gulf of Mexico leases, which lacked price thresholds and have allowed producers to escape paying royalties up to a certain volume.

If the House should amend S. 3711, Senate Majority Leader-elect Harry Reid (D-NV) has vowed to block the bill in the Senate and let it die as Congress adjourns for the year.

"The prospects for OCS legislation in the next Congress are currently very dim, and that's driving the pressure now. Based on the jostling we are seeing this week, the fate of the bill seems very much touch and go," Tezak said.

S. 3711 would make 8.3 million acres in the Lease Sale 181 area in the eastern Gulf and in a tract south of Lease Sale 181 available for oil and gas leasing. The mostly Republican-crafted bill also would provide protections (a minimum of a 125-mile, no-drill buffer zone) for Florida and would give four Gulf coastal states a major share (37.5%) of the federal royalties from leasing to be used in restoring their receding coastal areas. The Senate offshore version is far more limited than the House-passed OCS bill that would have opened the East and West Coasts to potential drilling.

Many in the energy industry initially backed the more comprehensive House OCS version, but they have since placed their support behind the Senate offshore measure, realizing that it either is going to be the Senate version or nothing in 2006.

House and Senate GOP leaders tried for months, although unsuccessfully, to reconcile the vastly different drilling bills. Senate leaders wanted the House to accept their narrower Lease Sale 181 bill in place of the more expansive House offshore measure, but House leaders repeatedly resisted the overture. But House Republican leaders last Friday abandoned their efforts to merge the two bills and agreed to take the Senate bill to the House floor for a vote before the 109th Congress adjourns (see Daily GPI, Dec. 4).

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