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Shale amendment to energy bill defeated handily, along with other Democratic bids

Phil Taylor, E&E reporter

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Washington, Feb 16, 2012 | comments

Democrats suffered several defeats on the House floor last night as Republicans and dozens of members of their own party broke ranks to defeat amendments to a GOP plan to vastly expand domestic oil and gas drilling.

The House in a 160-265 vote rejected a proposal by Rep. Jared Polis (D-Colo.) to remove language from the drilling bill that would resurrect a George W. Bush administration plan for oil shale in the Intermountain West that opened 2 million acres of lands to exploration and set low royalty rates designed to entice development.

The amendment was opposed by Rep. Scott Tipton (R-Colo.), whose western Colorado district contains much of the oil shale deposit. Thirty Democrats also opposed the amendment, and two Republicans -- Timothy Johnson of Illinois and Dave Reichert of Washington -- supported it.

Tipton said he opposed the Polis proposal in part because the bill included his amendment added in committee earlier this month to require the Interior secretary to consider the impacts of development on local communities, some of which still seethe from the disappearance of thousands of jobs when Exxon Mobil Corp. abandoned an oil shale project in the 1980s.

"We've actually been down that road before," Tipton told E&E Daily after the vote.

But he, like critics of oil shale, acknowledged that commercial development of the fuel will take considerable time.

"I think we need to recognize that we aren't going to see instant development because it's a developing technology to begin with," he said. "Obviously there are still questions that need to be answered and that's why I put in the amendment."

But Polis said it was "ridiculous" that the House was even considering reviving the Bush plan, which critics have charged was a giveaway to the oil industry that included royalty rates that would fleece states and local communities.

"This is a nonexistent industry, so it's impossible to do any projection about what these lands are worth, how much water is needed, what the regional impact is," Polis said after the vote. "We want to continue to work on the process with the Senate to ensure that our Western lands are not taken and sold in a fire sale to speculators."

With Sens. Mark Udall (D-Colo.) and Michael Bennet (D-Colo.) in strong support of Interior Secretary Ken Salazar's oil shale plan, it is highly unlikely the House proposal, which is sponsored by Rep. Doug Lamborn (R-Colo.), will proceed in the Senate.

The Obama administration has also issued a veto threat of the larger drilling bill, which includes provisions to open new offshore waters and the Arctic National Wildlife Refuge to drilling, in addition to permitting the Keystone XL pipeline. The energy bills will later be combined with a larger transportation authorization bill.

The oil shale bill was amended in committee to prevent the Interior secretary from lowering royalty rates in the future and included language urging consideration of socioeconomic impacts, the hiring of U.S. workers and use of domestic products.

The proposal came weeks after the Obama administration -- responding in part to an environmental lawsuit -- announced it was reducing by three-fourths the amount of lands available for development in Colorado, Wyoming and Utah, in addition to limiting future leases to research and development with the option of converting to commercial development.

The proposal was widely embraced by Colorado's Democratic governor and senators, in addition to environmentalists and agricultural leaders, but was panned by Republicans who argued it would stifle research in a deposit that holds more than a trillion barrels of oil equivalent.

Companies have tried for roughly a century to turn the kerogen in the rock into oil, but to no avail.

But Lamborn, who is a key supporter of development, said it makes no sense to craft policies that stifle research and development.

"I think it's worth at least experimenting," he said. "I just don't see why there is such opposition to this when they say it's not going to work. They just can't have it both ways."

But critics in Colorado questioned why the proposal was included in the House transportation bill given that the Congressional Budget Office estimated it will raise no revenues to help fund highways.

"The only thing certain about oil shale is that it is not going to fund our nation's highways," said Bill Midcap of the Rocky Mountain Farmers Union. "We see no reason to gamble away our water, our future, and Colorado farms and ranches on oil shale speculation."

Keystone, development, GOP amendments

The House last night also defeated several other Democratic amendments, including a proposal by Rep. Ed Markey (D-Mass.) to require that any fuel products from oil transported by the Keystone XL pipeline is sold in the United States.

One amendment by Rep. Mike Doyle (D-Pa.) would have required that 75 percent of the steel used in the pipeline by manufactured in North America.

The chamber also easily defeated Democratic proposals to block oil and gas development off Southern California and Northeast states.

"In my district, the environment is the economy," said Rep. Tim Bishop (D-N.Y.), who sponsored one of the amendments. "Oil-soaked beaches would devastate Long Island's economy, let alone the environment."

None of the Democratic amendments gained more than 193 votes.

But the House by voice vote did accept two Republicans amendments.

One amendment by Rep. Doc Hastings (R-Wash.) would make technical corrections to language for drilling in the eastern Gulf of Mexico and push back a lease sale in Alaska's Bristol Bay.

The other amendment by Rep. Gus Bilirakis (R-Fla.) would require a study of the impacts of drilling on Florida fishing and tourism.

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