The fate of the Senate Energy and Natural Resources Committee’s bill that proposes drilling reforms in federal waters was unknown Thursday after a group of senators walked out of a mark-up session following a flare-up over the hot button issue of increasing the coastal states’ share of revenues from energy production.

“We don’t have a path forward” for S.917, the Outer Continental Shelf (OCS) Reform Act of 2011, said a spokeswoman for Committee Chairman Jeff Bingaman (D-NM). She could not say when a mark-up of the bill would be rescheduled.

The committee was left without a quorum to continue its much-anticipated mark-up after a number of Republicans and Sen. Mary Landrieu (D-LA) — who offered an amendment to boost sharing of revenues from both oil and natural gas production and renewable energy development with coastal states — walked out.

The fireworks erupted over Landrieu’s amendment and a secondary proposal by Sen. Lisa Murkowski (R-AK) that would increase the revenue stream from offshore energy production to all coastal states. The twin proposals would expand upon the 37.5% share of oil and gas royalties that the Gulf coastal states received in a 2006 bill (see Daily GPI, Dec. 12, 2006). And, in attempt to mollify critics, they proposed broadening the sharing of royalties to include renewable development off coastal states.

The Murkowski proposal specifically called for the creation of a Clean Energy Trust Fund, which would provide coastal states revenues to invest in energy projects off their shores, said Murkowski spokesman Robert Dillon. He said the senator plans to “iron out the concerns” that some panel members raised and hopes to re-offer it when the committee resumes mark-up.

Bingaman has long been an opponent of any kind of revenue-sharing with coastal states, arguing that energy resources developed in the OCS belong to the entire United States, not just the coastal states. And President Obama has threatened to veto any energy bill that includes revenue-sharing.

The Senate energy panel did vote out to the Senate floor the Oil and Gas Facilitation Act of 2011, which, among other things, calls for the Department of Interior to conduct an inventory of oil and gas resources in the Atlantic, Eastern Gulf of Mexico and Alaska offshore regions; the phaseout of the mandatory OCS deepwater and deep gas royalty relief for future leases; a six-month extension of the period to issue federal guarantee instruments to the certificate holder for the Alaska natural gas pipeline; and clears the way for the Interior secretary to issue right-of-way permits for the construction of a high-pressure natural gas transmission pipeline in the Denali National Park and Preserve in Alaska.

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