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'Drill Bill' Loses Again with Moratorium Repeal Off the Table

Desperate to produce some kind of energy legislation to take home to constituents during the August recess, Democrats in the U.S. House of Representatives made another run at passage of a retreaded "use it or lose it" bill to restrict leasing on public lands Thursday, and lost.

The revised "use it or lose it" or "drill bill" offered by Rep. Nick Rahall (D-WV) won a majority, 244-173 votes, but lost the war because, like its predecessor, it did not command the two-thirds majority necessary for passage specified by the no-amendments rule under which it was offered. The vote on the earlier version was 222-195 (see NGI, June 30).

The House vote came after a coalition of Democrats from the other side of the Capitol, led by Sen. Jeff Bingaman of New Mexico, earlier in the week called on Interior Secretary Dirk Kempthorne to keep closer tabs on the status of oil and natural gas production from federal lands that have already been leased. In a letter the senators asked Kempthorne to specifically tell producers they are required to "diligently develop" their leases, and to direct them to submit regular reports on their progress in developing leases.

The latest House version to restrict oil and gas leasing had been advertised as having additional features to make it more attractive to the opposition. It added details on due diligence to clarify how producers could define their activities on current leaseholds in order to be eligible to bid on new leases. Producers would have to certify that they are "diligently developing" their current leases or relinquish them in order to be eligible to bid on new public lands leases. The measure would have directed Interior to issue new regulations within six months to establish what constitutes "diligently developing" and to set up civil penalties for failure to comply.

It also called for the Interior Department to conduct annual lease sales on the National Petroleum Reserve in Alaska, instead or the current timetable of once every two years. It would have banned the sale of Alaska oil outside the United States and encouraged construction of new pipelines to carry oil and gas from the National Petroleum Reserve to existing pipes and processing infrastructure on the North Slope.

A provision, aimed at the Trans-Alaska Oil Pipeline, called for annual reports on maintenance and operation to the Transportation Department and civil penalties for violations.

Regarding a natural gas pipeline from Alaska, the bill directed the president to coordinate with North Slope producers, federal agencies, the State of Alaska, Canadian authorities and others to facilitate construction of a pipeline from Alaska to the Lower 48 as expeditiously as possible.

Democratic supporters claimed the measure was aimed at forcing producers to make use of the 68 million acres of public land they currently lease before seeking new leases. Republicans responded that much of that area is lacking viable reserves or is tied up in litigation or permitting disputes, while potentially productive acreage is off limits. They also pointed out that changing the rules always results in delays while new rules are created.

The House procedural no-amendments rule on the bill meant Republicans could not add in their favorite measure to lift the congressional drilling moratorium on much of the Outer Continental Shelf. That type of compromise, while it might lose some Democratic votes, might draw in enough Republican votes to pass the package if it were brought up again.

Both the House and the Senate have been reduced to bill-writing on the floors of their respective bodies, bypassing committees, in their attempts to weigh in with something designed to appease energy price-weary consumers before the next election. Congressional leaders estimate that subtracting the August recess and an October recess or adjournment for campaigning, they have about five weeks left to accomplish that. The Senate next week will consider a bill offered by Senate Majority Leader Harry Reid, D-NV, aimed at controlling energy prices by reining in speculation.

The letter last Tuesday from Bingaman and 30 other senators urged Kempthorne to "exercise the full extent" of his authority with respect to lease term lengths on the Outer Continental Shelf and rental rates to ensure diligent development.

"We write to voice our concern over a significant problem in the management of federal oil and gas leases. Federal lands both onshore and on the Outer Continental Shelf that are already leased -- but not producing -- are our biggest opportunity to provide needed domestic oil and gas supply in the near term. It appears that the policy emphasis of this administration has been on having more lease sales, but we believe that not enough emphasis has been placed on encouraging the diligent development of federal lands once leased," wrote Bingaman, chairman of the Senate Energy and Natural Resources Committee, and the other senators.

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