Despite an abbreviated legislative calendar for the remainder of the year, the American Gas Association (AGA) on Wednesday said it was optimistic that Congress will vote out legislation opening more of the federal Outer Continental Shelf (OCS) to oil and natural gas leasing.
“We’re very, very hopeful” that Congress will pass an OCS bill this year, even though lawmakers will be in session for only 15 legislative days after they return from their August recess, said David Parker, president of the natural gas utility group, during a press briefing at the association’s headquarters in Washington, DC. “At the same time, we certainly recognize the challenges that are before the House of Representatives and the Senate. We are concerned in terms of them drawing hard lines in their respective positions.”
In the end, “hopefully reason will prevail and we will come up with a conference report that can be supported by both the House and the Senate,” he said. While the House and Senate bills would make additional gas-rich OCS areas available for drilling, they are vastly different from each other in their details. Negotiators will be faced with the challenge of reconciling these two bills under a short deadline, given that Congress plans to adjourn in late September for the mid-term elections in November. It’s not clear if Congress will return for a lame-duck session following the elections. Making matters even more difficult is the fact the Senate doesn’t want its OCS bill altered by the House, and the House doesn’t appear to be willing to accept the Senate version.
“We are very hopeful, in recognizing that there’s an election on Nov. 8,” that a conference report on OCS legislation will be produced, Parker said. “My sense [is that] there’s a need to certainly have a conference report” before lawmakers return home to face their electorate.
He believes Congress can vote out an OCS bill in 15 legislative days if it’s made a “matter of priority” by the leaders in both houses. “I’ve often said that…Congress, while it’s sometimes not very efficient, when they want to do something, they can do something literally overnight,” Parker said.
“If I had my druthers, I would be supportive of the House bill” (HR 4761) that potentially would open more areas of the OCS to leasing than the Senate measure (S 3711), which focuses solely on making more acreage in the eastern Gulf of Mexico available to producers, he noted. “Clearly, the House measure provides more natural gas in the long term for the American people.”
But “we will take anything we can get and we will support anything we can get,” Parker told reporters.
AGA’s Tom Moskitis, who monitors energy issues on Capitol Hill, said there has been a sea change in the way that Congress now views offshore drilling. “I think the Congress has come [a long] way on this issue. If you think back a few years, the prospect of drilling on the Outer Continental Shelf was given very long odds of ever coming to pass.”
Now there are two measures in the House and Senate — although extremely different — that seek to make this a reality, he noted. The question is no longer whether more drilling will occur in the OCS, but where, Moskitis said.
But the AGA is less optimistic that Congress will pass pipeline safety reauthorization this year, particularly in light of the situation in Alaska with the corroded, leaking BP oil pipeline. The BP incident “does complicate what needs to be done” with pipeline safety, said AGA’s Lori Traweek. “It’s going to make it much more difficult.”
The BP incident “should be a motivation” to pass the legislation, but instead it may have the opposite effect, she noted.
If the Republicans retain control of the House in November, AGA’s Parker believes there’s a possibility pipe safety legislation will be passed by the House this year. But Democratic control of the House would hurt the bill’s chances this year, he said. The Senate has yet to take up pipeline safety reauthorization.
The AGA also is “very concerned that that [Alaska gas] pipeline has not been agreed to” by Alaska lawmakers, Parker noted. Gov. Frank Murkowski, the chief proponent of the pipeline in the state, faces a tough primary battle next Tuesday. “Gov. Murkowski is running against two other individuals up there…and he’s not even expected to win the election in his own party,” he said. If he loses, this may mean that the negotiations to build the long-distance pipeline would have to start all over again, Parker believes.
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