Oil and natural gas issues were noticeably absent from the energy legislative agenda that the Senate Energy and Natural Resources Committee unveiled last Monday. The focus of the committee in the new Congress will be on nontraditional energy.

Committee Chairman Jeff Bingaman (D-NM) plans to propose legislation to promote renewable energy and enhanced efficiency through mandates, tax incentives and increased spending on research and development.

The Democrats’ agenda kicks off with calls to encourage the manufacture of electric and hybrid vehicles; update the nation’s infrastructure to accommodate plug-in technology at major hubs, such as ports and airports; a binding, national renewable mandate, requiring 15% of the nation’s electricity to be derived from clean energy sources by 2020; policies to encourage “smart grid” development to create a more reliable energy system; and measures to help lower utility bills for consumers and business by encouraging more productive use of electricity and natural gas through integrated energy management strategies, high-performance appliances and state-of-the-art green buildings.

Another key committee agenda item is global warming. Bingaman and Sen. Arlen Specter (R-PA) have circulated a draft climate proposal that seeks to establish a mandatory program for regulating greenhouse gas emissions. The draft will serve as the basis for discussion in a series of workshops to be hosted by the committee beginning Feb. 2. Bingaman last week said he was disappointed that President Bush did not more fully address global warming in his State of the Union address (see related story).

Also topping the Senate committee’s agenda is an extension through 2017 of existing tax credits for renewable energy, biofuels distribution and efficient vehicles, as well as new tax incentives for green buildings.

In addition, the panel plans to focus on accelerating the transition of the nation’s transportation sector to energy sources other than imported petroleum, such as domestic biofuels, according to Bingaman. And it intends to push for increased research and technology development for alternative fuels, including breakthrough fuel and vehicle technologies based on hydrogen.

Although not listed on the agenda, Bingaman already has signaled that the committee will take up a bill, which cleared the House earlier this month, that forces holders of flawed 1998-1999 offshore leases to renegotiate their contracts or pay a “conservation of resources fee” in order to bid on future government leases. It also repeals tax breaks for oil and gas producers and eliminates royalty relief for ultra-deep production in the Gulf of Mexico.

However, Bingaman has indicated that he will revise some of the provisions in the House measure that deal with recovering royalties and repealing tax breaks.

Despite efforts by Sen. Pete Domenici (R-NM) and other Republicans, it’s unlikely legislation to expand oil and gas drilling on the Outer Continental Shelf (OCS) will emerge from the committee. “That’s not part of his [Bingaman’s] agenda this year,” said Bill Wicker, a spokesman for Bingaman.

Nevertheless, Domenici (R-NM) indicated during a Senate Energy Committee hearing last week that he will be pressing the Minerals Management Service (MMS) for an updated inventory of the natural gas and oil resource that currently is inaccessible because of leasing moratoria on part of the OCS.

“No one has a clear idea of what resources are out there, and we will be talking to MMS to see what we can do to provide an assessment of what the actual oil and gas resources in the OCS [moratoria areas] are,” said Marnie Funk, a spokeswoman for Domenici, the ranking member on the Committee.

“There was a seismic survey authorized in the [Energy Policy Act of 2005], but the Department of the Interior doesn’t have the money for the survey [of the 1.67 billion-acre OCS]; it wasn’t funded last year and likely won’t be funded this year, so we are looking for ways aside from a seismic survey to get a more accurate picture of what resources we actually have out there,” she said. Current data on the OCS is decades old, and a new inventory could provide states that oppose offshore drilling with a better picture of exactly what they are missing.

“I think it will certainly be challenging this year to [pass OCS legislation],” said Funk. “Sen. Domenici…would gauge the political will before introducing legislation. That is way down the road from where he is right now.”

At the committee hearing last Thursday, representatives from the states of New Jersey and Louisiana clearly illustrated the opposing sides of the argument over opening up more of the OCS. While New Jersey wants to avoid any risk to its tourism, fishing and other coastal industries that might be posed by offshore drilling, Louisiana’s drilling, tourism, fishing and coastal industries have coexisted in its state for years, noted Marjorie Mckeithen, assistant secretary for the Louisiana Department of Natural Resources.

Sen. Mary Landrieu (D-LA) chastised New Jersey and other states that have opposed drilling off their shores for not doing more to become energy independent. She said she plans to fire off a letter to every governor in the nation asking them what they plan to do to make their states more energy independent if they are opposed to offshore drilling. Landrieu and Rep. John Peterson (R-PA) announced plans last week to craft legislation that would build on a 2006 bill that opened up an additional 8.3 million acres in the Central Gulf of Mexico to oil and natural gas drilling (see related story). The measure, dubbed “OCS II,” would give coastal states the option to allow oil and gas exploration and production off their shorelines.

Mckeithen noted that 34% of the nation’s gas supply and 30% of its oil supply is either produced in Louisiana, produced offshore Louisiana or moves through Louisiana. The state is at the top of the list when it comes to OCS oil and gas production and royalties provided to the federal government.

“We want to continue [providing the nation with energy] and we’re ready to move forward as partners getting a share [of federal royalties] and not just the impact of all that activity,” said Mckeithen. “Louisiana firmly believes that production and [environmental] protection can coexist. We’ve proved that time and time again.” She noted that while Louisiana is busy providing a large part of the nation’s energy, it is also busy providing 30% of its fish and promoting its tourism industry.

However, Lisa Jackson, commissioner of the New Jersey’s Department of Environmental Protection, reaffirmed her state’s opposition to offshore oil and gas lease sales. “Such actions leave us vulnerable to future damage, and quite frankly in our opinion in New Jersey [and many other Mid Atlantic states] our coastal economy is too important, our tourism economy is too important for us to move in the direction of exporting the oil and gas resources off of our coasts. I can only speak for New Jersey, but I think it’s in the record that other Northeast states, certainly including Delaware and Connecticut, have been vocal in their opposition as well.”

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