House votes to expand offshore drilling

Fuel Fix
By Jennifer A. Dlouhy
June 26, 2014

WASHINGTON — Even before the House voted on Thursday to force the federal government to allow drilling off the South Carolina, Virginia and California coasts, lawmakers admitted the plan was going nowhere.

The Republican-backed drilling legislation, which was approved in a 229-185 vote, is a compilation of other measures that have passed the House before only to stall in the Senate, and it is sure to meet the same fate this time around, a political reality even bill backers acknowledged.

“It is clear that this bill will not become law as it is,” said Rep. Jim Costa, D-Calif., who supported the measure. “We have previously voted on these measures before in other bills in this Congress, and the United States Senate has failed to take them up, nor will they take this bill up.”

Rep. Peter DeFazio, D-Ore., an opponent, quipped that the bill’s repeated appearance on the House floor was part of an inevitable “Groundhog Day in June for energy bills, a faux sort of attempt to pretend we really care about the extortionate prices that people are paying because of Big Oil in the United States and speculation on Wall Street.”

Sending a message

But bill backers are hoping it will send a strong signal to the Obama administration that it should give oil and gas companies a chance to drill in Atlantic waters as it writes a five-year plan governing the activity from 2017 to 2022. Those areas are off limits under the current schedule for selling offshore oil and gas leases, which expires in August 2017, but industry leaders and their Capitol Hill supporters want them to be up for grabs in the 2017-2022 plan that Interior Department officials have just started assembling.

“There needs to be a new plan, as outlined in this bill on the floor, that opens new areas and helps put more than a million Americans back to work,” said Rep. Doc Hastings, R-Wash., the bill sponsor.

The legislation extends from offshore waters to onshore lands, with the goal of opening more of both to drilling bits. It would:

require the Interior Department to allow energy development on at least a quarter of federal lands that are eligible for leasing (but have not previously been offered up).
restrict the Interior Department’s ability to modify oil and gas leases once they have been awarded.
force the government to sell leases allowing energy companies to research, develop and demonstrate oil shale projects in the west.
put new deadlines on federal regulators’ review of applications for permits to drill on public land.

But the bill’s cornerstone was its offshore drilling provisions, which would force the Interior Department to take at least a half of unleased coastal areas with the greatest energy potential and make it available for oil and gas development. That territory would have to be included in a new five-year offshore leasing plan beginning in 2015 — not 2017 — under the legislation.

California drilling

More immediately, the government would be forced to allow oil and gas activity in some Atlantic and Pacific waters. Regulators would have to auction leases near Virginia’s coastline within a year and would have two years to do the same near South Carolina s. Areas off the California coast and near existing oil and gas infrastructure near Santa Barbara would also have to be auctioned off before the end of this year.

Federal regulators also would be forced to auction off oil and gas leases in areas where the neighboring state governor asks to see the activity. That provision responds to the current dynamic in Virginia, where some state leaders want to see drilling off the coast, even though the federal government is not pursuing the activity.

Finally, the measure would siphon off more federal revenues from offshore oil and gas activity for coastal states. The revenue-sharing language in the House bill was drafted by Rep. Bill Cassidy, R-La., who is challenging Sen. Mary Landrieu, D-La., for her seat in the Senate. Landrieu has pushed similar revenue-sharing legislation in that chamber.

Gas prices

Republicans widely cast the legislation as a chance to boost domestic oil and gas production — already approaching a historic high — and lower gasoline prices as a result. Even the bill title spelled it out; the measure was dubbed the “Lowering Gasoline Prices to Fuel an America That Works Act of 2014.”

But Democrats said the GOP was overselling it. “This bill will not lower energy prices, and it will not help us develop new sources of clean energy,” said Rep. Rush Holt, D-N.J.