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Ideal gas law 

Political pressure over gas prices generates enough heat to push controversial bill forward

An eco-fiscal staring contest between two California members of Congress—Lois Capps, D-Santa Barbara, and Richard Pombo, R-Tracy—swung suddenly to the right on June 29 when the U.S. House finally passed the controversial Deep Ocean Energy Resources (DOER) Act. After years of ever-narrowing misses, supporters of the bill sweetened the pot enough to score a preliminary 232-187 win to effectively end a 25-year-old offshore drilling ban.
 
The moratorium under fire currently protects 85 percent of American coastline from drilling operations.
 
Just six weeks earlier, pro-drilling lawmakers suffered the latest in a series of defeats to scuttle the longstanding legislation, an event that had become somewhat of an annual tradition on Capitol Hill since the ban passed in 1981. By splitting the bill into separate proposals to allow oil and natural-gas drilling, a bid by Pombo and Pennsylvania Republican John Peterson drew record support but fell still 14 yeas short in the May vote.
 
This time around, the challengers took a decisively different approach and went for the state ledgers, offering a significantly higher share of the drilling royalties—as much as 75 percent down the road—to states that house drilling operations. Currently, states receive less than 5 percent of all drilling royalties.
 
The White House harrumphed at the notion of surrendering federal majority share of the offshore income source, but President George W. Bush, a longtime supporter of lifting the moratorium, is not expected to veto on those grounds. However, before reaching that plateau, the bill must first pass through the Senate floor.
 
Melissa DeLaney of the House Resources Committee, the body chaired by Pombo, said senate energy chairman Pete Domenici plans to take over marketing the bill. The June 29 vote marked the first time in moratorium history that a move to lift the ban ever made it out of Congress. In May, Republican lawmakers unanimously declared an energy-themed legislative summer—capitalizing on a mounting fuel crisis in the throes of election season.
 
As gas prices remain marooned at a stable but lofty plateau, even traditionally anti-drilling California has split along party lines. Only two state Republicans voted against striking the ban this time around.
 
“The fact that something like this can move forward, we’re really concerned about that,� Capps’ press secretary Emily Kryder said.
 
The revenue-sharing provision, drafted by a crew of Louisiana lawmakers, would immediately benefit those states with established drilling operations—primarily the western Gulf states of Texas, Louisiana, Mississippi, and Alabama. Based on current production calculated with the new royalty standards, those four would stand to gain almost $19 billion in revenue over the next four years.
 
In currently protected waters, the bill would amp up revenue-sharing bonuses the closer the rig landed to the shore—an item that opponents railed would place Western and Gulf coastlines on the auction block. For California, the bill would also allow grandfathered drilling operations—most of which lie off the coast of Santa Barbara County—to trade their existing leases for sites currently in moratoria waters.
 
The Congressional Budgeting Office released a report on June 27 analyzing the federal windfall of the legislation, but didn’t delve into the income California and other coastal states could potentially derive. Yet, judging from the federal revenues taken from the small percentage of coastline already harvested, the figure for the Golden State would land safely in the billions.
 
“They put as much sugar in it as they could,� local Sierra Club spokesman Andrew Christie commented, echoing the outcry from environmental and tourism lobbies in coastal communities across California, Florida, and the south Atlantic Coast.
 
Proponents of the bill claimed that the revenue streams for other states would open up as new installations take root. When exactly? Within three years, according to the Department of the Interior (DOI), the government body charged with dealing out drilling leases.
 
An assessment of offshore fuel resources conducted by the DOI’s Mineral Management Service in January estimated 10.17 billion barrels of undiscovered recoverable oil available on California’s slice of the Pacific Outer Continental Shelf. That expanse of ocean floor also contains a projected 16.6 trillion cubic feet of retrievable natural gas.
 
“The DOER Act will finally correct the one-size-fits-all bans that were enacted during times when energy production and environmental protection were thought to be mutually exclusive,� commented Pombo, key author of the bill.
 
Pombo and Peterson argued that DOER would award states greater control over their offshore recourses, including the power to ban offshore drilling at the state level. However, Capps—along with ban advocates from Florida—complained that the new law required coastal states to jump through a series of hoops to draft their own bans. If California scripted a statewide moratorium, for example, the legislature must vote to petition the federal government with approval by the governor. The bill requires that the process be repeated every five years.
 
Opponents of the bill also joined with the Bush Administration in protesting the potential deluge of federal funding lost into the state coffers—a sum of, according to Capps, $74 billion over the next 15 years and $600 billion over the next 60.
 
“For my fiscally conservative friends who’ve spent hours trying to strike $100,000 earmarks from appropriations bills, let me repeat that: The bill will add $74 billion to the deficit over next 15 years and $600 billion over the next 60 years,� Capps quipped in her June 29 speech before Congress.
 
More contentious debates will soon await DOER in a slightly bluer Senate. Two Florida Senators have already threatened to filibuster. ∆

Staff Writer Patrick M. Klemz can be reached at pklemz@newtimesslo.com.

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