An E&E Publishing Service
(Monday, January 30, 2012)
Phil Taylor, E&E reporter
The House Natural Resources Committee this week is expected to pass a trio of energy bills to increase domestic oil and gas production, create jobs and raise new revenues for highways.
The proposals have drawn heat from environmentalists, most Democrats and some Republicans who oppose drilling in the Atlantic and Pacific oceans and the Arctic National Wildlife Refuge -- creating a political volcano set to erupt as the measures move to the House floor.
The bills, part of House Speaker John Boehner's (R-Ohio) "American Energy and Infrastructure Jobs Act," would expand offshore drilling, open the refuge and reinstate a scrapped George W. Bush administration plan to promote oil shale in the West.
Republicans hope the proposals will create thousands of jobs and raise billions of dollars in new revenues that could help defray the cost of a highway bill reported to cost some $260 billion over the next five years.
The House Transportation and Infrastructure Committee on Thursday will consider a long-term reauthorization and reform of federal surface transportation programs (see related story). The energy-infrastructure package is expected to see action in the House before the current highway bill expires at the end of March.
"Expanding access to America's abundant offshore and onshore energy resources will create millions of new American jobs, lower energy prices and generate new revenue to help pay for infrastructure improvements," said committee Chairman Doc Hastings (R-Wash.) in a statement. "When new energy resources are developed, we'll need updated infrastructure to bring it to market. This creates a link that will allow for both American energy jobs and American infrastructure jobs to be created simultaneously."
Hastings at a hearing on the bills last November said that while the bills had not received an official budget analysis, the money would provide a "significant contribution" to the nation's Highway Trust Fund, which some have warned needs up to $100 billion in new revenue within the next several years and could soon be completely insolvent (Greenwire, Nov. 18, 2011).
But the plan is likely to run into stiff opposition from Democrats who have made protecting the 19-million-acre refuge one of their top priorities in the new session. Eben Burnham-Snyder, a spokesman for committee ranking member Rep. Ed Markey (D-Mass.), said to expect "lots of amendments."
Skeptics of the GOP plan have cited Congressional Budget Office figures suggesting expanding oil and gas drilling off the nation's Pacific and Atlantic coasts would save about $800 million over the next decade.
And the latest CBO estimate -- which would vary depending on the scope of the bill and price of oil -- found total revenue from drilling on the refuge's coastal plain would be $3.1 billion over the next decade, according to Markey. Moreover, revenues from new oil shale leases would likely produce negligible revenues in the near-term because the technology is still far from commercial scale.
"It doesn't seem like actually funding [highways] is a priority," said Burnahm-Snyder.
But supporters say the energy bills are a long-term investment designed to create jobs and increase energy independence in addition to generating new highway revenues.
"These proactive measures represent a significant opportunity for Congress to clearly demonstrate a commitment to developing American energy resources and supporting American energy jobs," Hastings said.
Prospects on the House floor
While the bills are expected to pass the committee, some see a tougher fight in the full House.
For one, more than a dozen current House Republicans in 2007 opposed a procedural motion to allow development in the refuge. And some believe there are a handful of new Republicans, most of them from Eastern states, who would oppose the ANWR proposal if it were offered on its own.
"For a small number of Republicans, and for a lot of Democrats, the Arctic Refuge is just a no-no, and that's just pushing things too far," said Jim DiPeso, vice president for policy and communications for Republicans for Environmental Protections.
But others said political winds, and voter expectations, have shifted. The measures come during an election year in which gas prices remain high and unemployment hovers around 8.5 percent.
"Because of the impact on pretty much every state in the nation from a jobs and infrastructure perspectives, we should see quite a lot interest from politicians on the Hill," said Adrian Herrera, who directs Arctic Power, which lobbies for the state of Alaska in favor of developing the refuge.
"This is the first time we've had leverage in quite a while," Herrera said, noting the majority of Republicans in the House. "The question is what happens on the Senate side. It may be a slow death, but I don't think so because of the jobs component of this bill."
Hastings said he hopes the bills will have better success in the Senate after earlier House-passed offshore drilling proposals languished at the upper chamber's doorstep. But he did not appear willing to amend his bills to satisfy Democratic criticism.
"We can only do the work that we're bound to do," he said yesterday on Platts Energy Week. "I would hope the Senate would respond in kind, and I would hope it's a bill the president would sign."
If the package passes the House as planned, it would mark the first time the chamber has approved drilling in the refuge since 2005.
The Interior Department in a written statement last year said it opposed all three proposals, arguing they would pose unacceptable environmental risks.
"The Arctic National Wildlife Refuge, because of its unique conservation values and importance as wildlife habitat, is a place where development is inappropriate," the agency said.
Schedule: The markup is Wednesday, Feb. 1, at 10 a.m. in 1324 Longworth.
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E&E Publishing Service
POLITICS: Partisan battles loom over Keystone, drilling proposals (Monday, January 30, 2012)
Elana Schor, E&E reporter
The House GOP this week will edge closer to a high-stakes, two-track confrontation with Senate Democrats and the Obama administration with a politically popular infrastructure measure serving as the battlefield.
House Speaker John Boehner (R-Ohio) announced yesterday that he will seek to override the president's veto of the Keystone XL pipeline as part of a long-term transportation bill -- if the oil link is not already advanced during bicameral payroll tax-cut talks. The move adds a second volatile issue to a typically noncontroversial infrastructure package that his chamber wants to pay for in part by expanding offshore and Alaskan drilling, which is opposed by most Democrats and the White House (see related stories).
"If [Keystone XL is] not enacted before we take up the American Energy and Infrastructure Jobs Act, it will be part of it," Boehner said of the pipeline in an interview with ABC's "This Week," referring to the GOP's title for its drilling-and-transportation package.
Boehner's comments stand to put new pressure on his Senate counterparts to go beyond the bipartisan, middle-ground approach to the infrastructure measure taken so far by their Environment and Public Works Committee. A two-year federal transportation bill passed unanimously last year by panel Chairwoman Barbara Boxer (D-Calif.) and ranking Republican James Inhofe of Oklahoma did not include language allowing new coastal oil production and in the Arctic National Wildlife Refuge (Greenwire, Nov. 9, 2011).
Inhofe has yet to publicly discuss his openness to considering the House's plan for funding new road, rail and bridge projects by boosting domestic drilling, a goal he has long advocated on its own. But Boxer on Thursday signaled her confidence in the bipartisan framework the environment committee has crafted, telling reporters that the House should follow the upper chamber's "model of bipartisanship" and avoid saddling the transportation package with "controversial items."
Fast-tracking Keystone XL may prove more controversial to red-state House Democrats -- who would be directly undoing a decision by President Obama in pushing the $7 billion, Canada-to-U.S. oil line -- than the offshore drilling language set to clear the House Natural Resources Committee this week.
While 33 conservative Democrats in May supported Natural Resources Chairman Doc Hastings' (R-Wash.) plan to mandate new offshore lease sales in Virginia and the Gulf of Mexico, just 10 House members of Obama's party supported a payroll tax-cut plan that would force him to make a decision on the XL line. By contrast, 47 House Democrats backed a July stand-alone bill that would have expedited the link between Alberta's oil sands and Gulf Coast refineries, a project that could nearly double U.S. imports of emissions-intensive Canadian crude.
Even if Inhofe and Senate Republicans press for a vote on Keystone XL during consideration of the infrastructure bill, the endorsement of upper-chamber Democrats who back the project on its merits is by no means guaranteed. One of those pro-pipeline Democrats, Sen. Ben Nelson of Nebraska, said Thursday that he has not talked with the GOP about legislatively advancing the project, adding that he voted for last year's payroll tax-cut proposal "in spite of" its provision setting a deadline for Obama to rule on the XL link.
Senate Energy and Natural Resources Committee ranking member Lisa Murkowski (R-Alaska) yesterday called it a "missed opportunity" for the White House to deny Keystone XL and said it is important Congress compel the administration to act, perhaps via the payroll tax cut measure. She added on Platts Energy Week that there are environmental risks to allowing Canada to pipe the fuel to its West Coast instead, where it would be shipped on single-hulled Chinese tankers to refineries that are subject to much lower environmental standards.
Current federal transportation funding expires on March 31, a full month after the deadline for lawmakers to agree on a strategy for extending payroll tax relief. That gap means that the fate of the pipeline could be resolved before Boehner's conference can move to attach it to the infrastructure bill.
No matter what bill serves as the vehicle for Republicans to wage their Keystone XL clash, some in their party question whether a legislation-free bid to spotlight the negative economic consequences of the pipeline's rejection could pay greater dividends come Election Day (E&E Daily, Jan. 27).
Reporter Phil Taylor contributed.
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