The American Gas Association (AGA) ran radio ads in the Washington, DC area last week that called on Congress to pass during the lame-duck session legislation opening the Outer Continental Shelf (OCS) to more oil and natural gas drilling. The fate of an offshore drilling bill, however, remained uncertain as the first week of post-election negotiations on OCS drilling produced few results, Capitol Hill sources said.

The ads ran on two Washington radio stations — WMAL and WTOP — during morning drive time and featured James. H. DeGraffenreidt Jr., incoming AGA chairman and chairman/CEO of Washington Gas Light, which provides natural gas to the metropolitan Washington and surrounding regions in Virginia and Maryland.

“Demand for natural gas is up while supply has remained static. So last winter prices soared,” said DeGraffenreidt in one of the radio ad spots. “It’s time for Congress to do its part. Opening the Outer Continental Shelf to exploration will help us meet our natural gas demand for decades.” It’s estimated that approximately 85% of the federal OCS currently is off limits to producers.

The AGA, which represents natural gas utilities, is one of a number of gas-related groups that are hoping Congress takes action on offshore drilling during the lame-duck session. It all could come down to how long lawmakers stay in session. Some believe Congress will remain in session until December, while others say it could be much shorter.

If any OCS bill has a chance in the lame-duck session, it may be the narrower Senate measure (S. 3711) that would make 8.3 million acres in the Lease Sale 181 area in the eastern Gulf of Mexico and in a tract south of Lease Sale 181 available for oil and natural gas leasing. The more comprehensive House measure (HR 4761), which would open up a greater swath of the OCS that has been closed to producers, likely faces slimmer odds. The House bill would give states bordering the Pacific and East Coasts the option to allow oil and gas drilling within 100 miles of their shorelines.

Negotiations to reconcile the House and Senate OCS drilling bills were deadlocked when lawmakers recessed in late September. Senate leaders wanted the House to accept their narrower OCS bill in place of the more expansive House offshore bill, but House leaders resisted the overture. That was before the November mid-elections that dramatically changed the political landscape in Washington.

The “popular perception right now” is that House Republican leaders will be more likely to accept the Senate’s limited OCS version, particularly given the recent election defeat of Rep. Richard Pombo (R-CA), a major architect of the House OCS bill, said Chris Tucker, a spokesman for Rep. John Peterson (R-PA), who helped to craft the House measure as well.

“Because of the elections, our bargaining position [with the Dems over OCS] has been eroded,” he noted. But “I think there’s still a bargain to be made here. It goes beyond simply adopting pell mell the Senate bill.”

Tucker said he was encouraged by the remarks of Sen. Harry Reid (D-NV), who will be the majority leader in the 110th Congress. Reid said that offshore drilling legislation would be a priority in the lame-duck session. “That was heartening,” Tucker noted. President Bush also has called on lawmakers to pass offshore drilling legislation before adjourning for the year.

Even if the modest Senate OCS version is ultimately passed, “I think that speaks volumes [about] our Democratic leadership…that they can give on this issue,” Tucker said.

In a related development, The New York Times in an editorial last Monday called on Congress to delay action on an OCS drilling bill during the lame-duck session. “There has always been a danger that the two [House and Senate] bills would go to a conference committee where…the usual horse-trading would produce a bad bill much along the lines of the House [OCS] bill. The danger may now be greater. Mr. Pombo’s defeat in [the] election raises the distinct possibility that he will make one last desperate effort to help his friends in the oil and gas industry before he retires into well-earned political obscurity,” it said.

“The terrain during a lame-duck session is notoriously treacherous. Our suggestion, therefore, is that Congress take a deep breath and postpone any energy legislation until next year. At that point, [Sen. Mary Landrieu of Louisiana], whose party will be in charge, can try again. Alternatively, she could work with other leaders to produce a true energy bill — a comprehensive measure that would also seek to reduce consumption by encouraging more efficient cars and alternative fuels. As Ms. Landrieu concedes, drilling is only part of the energy equation.”

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