The House Resources Committee on Wednesday voted out follow-up energy legislation that sets the stage for more exploration and production on federal onshore and offshore lands, with a focus on natural gas-directed leasing on the Outer Continental Shelf (OCS), and it would relax environmental regulations to encourage more production and construction of energy facilities.

By 27 to 17, the panel voted to adopt the Republican-crafted legislation package that included a number of controversial proposals that failed to make it into the national energy policy legislation that was signed into law by President Bush in early August. Democrats criticized the bill as being hastily crafted in the wake of hurricanes Katrina and Rita, noting the “ink was barely dry on the last [energy] bill.”

Rep. George Miller (D-CA) said the committee’s bill was comprised of a “coalition of losers” from the energy bill that were now back for a “second bite of the apple.”

At press time, the House Energy and Commerce Committee still was marking up separate energy legislation. Although the bill (H.R. 3893) would focus on spurring the construction of refinery capacity in the United States, it also would give FERC new authority to regulate the rates for gathering service on the OCS. FERC Chairman Joseph Kelliher had asked Congress to take this action earlier this month.

The committee, chaired by Rep. Joe Barton (R-TX), had defeated an amendment earlier in the day that would have prohibited price gouging of gasoline, crude oil, natural gas and other energy fuels. The measure, sponsored by Rep. Bart Stupak (D-MI), proposed imposing tough civil penalties on violators, which would be used to fund the Low-Income Home Energy Assistance Program. Following the defeat at the committee level, Stupak was expected to introduce the bill as a stand-alone measure.

A key victory for the natural gas industry in the House Resources’ energy bill was the adoption of an amendment, sponsored by Reps. John Peterson (R-PA) and Neil Abercrombie (D-HI), that gives states the option to engage in natural gas-only leasing and pre-leasing activities. He believes the nation can “drill our way out” of the “explosion” in natural gas costs that are anticipated for this winter. Peterson late Tuesday offered the gas-only measure as stand-alone legislation.

The House panel, chaired by Rep. Richard Pombo (R-CA), also approved language that would give the legislatures and governors of interested coastal states the opportunity to opt out of the federal moratorium and allow oil and gas development off their shores. It would provide states with a higher share of the federal revenues from offshore energy production as well. At the same time, the measure allows anti-drilling states, such as Florida, to solidify the federal ban on offshore production if they choose not to develop energy resources.

By a two-to-one margin, Republicans and some Democrats voted against an amendment, sponsored by Rep. Edward Markey (D-MA), that sought to strike the entire title of the bill expanding oil and gas production activity in the OCS.

“If you knock out this section, [then] we’re lost,” said Abercrombie. “It’s my personal view that the safest place to produce energy is in the OCS,” echoed Peterson. He noted that expanded OCS drilling is critical to reducing natural gas prices. “This issue is a greater threat than terrorism, if we don’t bring natural gas prices down.”

Rep. Frank Pallone (D-NJ) said he doubted the bill would tame “skyrocketing natural gas” by winter, and he added there was nothing in the measure that would protect New Jersey in the event a neighboring state opened its coastlines to producers.

This is a “fundamental and crucial amendment to establishing energy independence” in the United States, Abercrombie said. In adopting the amendment, committee members agreed that it was technologically feasible to drill for only natural gas. Canada, for example, drills for and produces only natural gas in the Great Lakes, one lawmaker said.

Peterson offered the same proposal last May on the House floor as part of the Interior Department appropriations bill, but it was soundly defeated by 267-157.

A proposal by Rep. Chris Cannon (R-UT) sparked the most controversy during mark-up Wednesday. This was “the mother of all bad amendments,” proclaimed Rep. Nick Rahall of West Virginia, the ranking Democrat on the panel. It would give the president the unilateral authority to open up national forests and Bureau of Land Management (BLM)-controlled lands, as well as the coastal areas on the East and West Coasts, to oil and natural gas development. He later withdrew the proposal, saying he would work with Abercrombie and Rep. Ron Kind (D-WI) to develop “more agreeable language.”

“As it stands right now,” the proposal would give President Bush and other presidents “broad opportunity” to authorize drilling on federally owned and controlled lands, Abercrombie said. It gives “unbelievable power to one person,” Kind agreed. He also was troubled by the fact that the proposal did not specify that the president could only invoke such power during times of emergency.

In addition, the House panel approved a proposal that would provide incentives to encourage producers to consider drilling deeper oil and gas wells onshore.

Markey sought to block a provision in the bill that would authorize production of an estimated 10.4 billion barrels of oil in the northern coastal plain of the Arctic National Wildlife Refuge (ANWR), but he was unsuccessful.

Rep. Miller argued that ANWR, as well as other proposals favorable to oil and gas, were attempts at a “Hail Mary Pass” by Republicans to address the energy shortfall and price run-ups in the wake of the hurricanes.

Pombo opposed the Markey amendment, saying that the Massachusetts lawmaker’s efforts to strip out all of the oil and gas provisions would only exacerbate the energy problems facing the nation.

The committee also defeated an amendment, sponsored by Rep. Tom Udall (D-NM), to strike a portion of the bill that was “unduly riddled” with waivers of the National Environmental Policy Act (NEPA). Udall urged the panel to wait for the findings of the House NEPA Task Force next month before taking action.

But Rep. Cathy McMorris (R-WA), chairwoman of the task force, said she believed it was appropriate for the committee to streamline NEPA roadblocks, and added that the bill was not “out of bounds.”

Moreover, the committee approved a proposal to reactivate the royalty relief program for stripper wells within three months.

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