House Republicans denounced a “discussion” draft of a continuing resolution (CR) that includes an energy bill (HR 6899) passed last week that would allow drilling as close as 50 miles off the Atlantic and Pacific coasts.

Rather than take the chance of letting the long-time drilling moratorium in appropriations bills lapse, which would then allow drilling three miles off coastlines, House Democrats propose to insert HR 6899 in the CR that would keep the federal government operating past Sept. 30. The Democrat-sponsored energy bill, which passed by 236 to 189 last Tuesday, is opposed by a number of House and Senate Republicans and considered unlikely to pass in the upper chamber, The Hill newspaper reported. President Bush also has threatened to veto the House bill (see Daily GPI, Sept. 18).

“The inclusion of this bogus ‘drilling’ language [in the CR] is not only a slap in the face to million of families, seniors and small businesses trying to make ends meet during our nation’s energy crisis, it’s unacceptable,” said House Minority Leader John Boehner (R-OH).

“If anyone had previously doubted whether [House Speaker Nancy Pelosi’s] sham energy bill lacked both the merit and ability to become law, her intention to use a must-pass, temporary appropriations measure to sneak it through should erase all question,” echoed Minority Whip Roy Blunt (R-MO). He called on rank-and-file Democrats to dissuade Pelosi from her plan to include the energy bill in the funding measure.

“We do not think a weak drilling package has much hope,” said analysts Kevin Book and Patrick Hughes for FBR Capital Markets.

The House energy bill opens the door to drilling 100 miles from shore without a coastal state’s consent and would allow a state to “opt in” to drilling as close as 50 miles from shore with the approval of its legislature.

Republicans and the oil and natural gas industry contend that the bill takes a lot of “promising areas” off the table by setting a 100-mile buffer for drilling off the Atlantic and Pacific coasts and barring further activity in the gas-rich eastern Gulf of Mexico. Nor does the bill provide for sharing of royalties between the federal government and coastal states, so there’s no incentive for states to permit leasing (see Daily GPI, Sept. 17).

Republicans also oppose provisions in HR 6899 that would raise taxes on oil and gas companies by $18 billion; would require holders of the flawed deepwater leases issued in the late 1990s to renegotiate their lease contracts to include price thresholds, before they can bid on new offshore leases; and would require producers to “diligently develop” the federal lands that they already control.

On the Senate side, Democratic leaders are now considering a measure that would fund the federal government into next March — three months later than previously planned — although the move is unlikely to prevent a lame-duck congressional session, The Hill reported. Democrat leaders proposed the longer-term funding measure Monday instead of the previous shorter-term CR.

Diverting its attention briefly from the Wall Street turmoil, the Senate Tuesday (Sept. 23) is expected to vote on a $17 billion package to extend tax credits for renewable fuels and energy efficiency.

“A strong showing on today’s Senate votes on tax ‘extenders’ would not only weaken the president’s veto pen but would also send a message to House conservative Democrats that they must soften their opposition to unreimbursed spending or weaken their party,” the FBR analysts said. The House is expected to take up its own tax extenders package Wednesday under the suspension of rules, which would require a two-thirds majority vote to pass.

The FBR analysts believe the tax extenders package has the “highest odds” of clearing Congress after the November elections as part of a second-stage CR.

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