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House Backs Gulf Coast Energy Provisions During Transportation Bill Debate

By Lauren Gardner, CQ Staff

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Washington, Feb 16, 2012 | comments
Gulf-state lawmakers succeeded in boosting the amount of offshore drilling revenue their states can receive each year and gaining more control over how states can spend oil and gas revenue during House consideration of a broader transportation package Wednesday.

The chamber adopted 266-159 an amendment by Louisiana Republican Jeff Landry to raise the annual cap on offshore energy revenue that Gulf Coast states may share to $750 million beginning in fiscal 2023. The measure, which skirts a pay-as-you-go trigger because it falls outside of the 10-year budget window, would keep the current $500 million-a-year ceiling, which is set to expire in fiscal 2016, in place through fiscal 2022.

The House also adopted by voice vote an amendment by Louisiana Democrat Cedric L. Richmond to allow states to use revenue from offshore oil and gas leases for wetland conservation, coastal restoration or hurricane protection projects.

The energy elements of the House GOP’s expansive energy and transportation package (HR 7) would use revenue from future oil and gas production as a partial offset for the legislation. Specifically, they would open up a portion of Alaska’s Arctic National Wildlife Refuge to oil and gas exploration and production (HR 3407) and allow drilling off the coast of southern California and in the currently off-limits eastern Gulf of Mexico (HR 3410).

The legislation would institute a revenue-sharing formula separate from one created in 2006 for Gulf Coast states. The new system would phase in revenue sharing of up to 37.5 percent, with no cap, for other coastal states with offshore energy production. Natural Resources Committee Chairman Doc Hastings, R-Wash., has promised to work with Gulf-state lawmakers this year to avoid having a dual revenue-sharing system.

Some lawmakers oppose the concept as an entitlement program benefitting a few states when the money should be spent on all Americans, since it is generated from public resources. Lawmakers from states with offshore drilling, however, point to other states with energy development on public lands that receive about half of federal revenue from oil and gas production.

Another measure (HR 3408) included in the energy portion of the highway reauthorization would resurrect a George W. Bush administration oil-shale leasing program for public lands while preventing the Interior Department from revising it, a move that would open up Western states to experimental extraction techniques for a resource that is not yet commercially viable.

The title also includes legislation (HR 3548) to green-light the 1,700-mile Canadian tar sands pipeline and shift permitting authority for the project from the State Department to the Federal Energy Regulatory Commission.

Colorado Democrat Jared Polis offered an amendment to remove the oil-shale language from the legislation. Democrats have especially criticized that piece of the energy title over both the unproven drilling technology and the Congressional Budget Office’s score of the bill, which said the measure would have no impact on revenue over 10 years.The amendment failed on a 160-265 vote.

With leadership’s decision to postpone a final vote on the transportation package until after the Presidents Day recess, it was unclear Wednesday whether the energy title would receive a vote by Friday.

“We are still beginning consideration of the energy/infrastructure plan on the floor this week, and we may or may not get as far as a vote on the energy piece, depending on several factors,” said Michael Steel, spokesman for Speaker John A. Boehner, R-Ohio. Those factors include the number of amendments to the energy provisions members can weed through by Friday, he said, which could be affected by the timing of an expected vote on the payroll tax extension agreement.

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