Senate Energy Bill a Moving Target as OCS Deal Nears Completion

Senate Energy Committee Chairman Pete Domenici's (R-N.M.) offshore drilling plan will likely form the base of a Senate energy bill, assuming a deal can be reached among competing Gulf of Mexico senators who either want coastal protection or a bigger slice of outer continental shelf federal production revenue.

If Domenici and others do manage to cobble together a deal, the bill could theoretically play host to a modest tax package, fuel efficiency standards, an oil refinery bill and price gouging language, lawmakers said yesterday following their caucus luncheons. Much later in the day, Domenici said an agreement on a Gulf Coast drilling plan is at hand. When pressed on whether a deal that would allow the measure to proceed to the floor had been reached, he replied "yes" but did not provide details.

A committee aide confirmed an agreement is being finalized and said lawmakers hope to announce it by the end of the week. It is not yet completely certain if the gulf drilling plan will be joined with other energy measures, the aide said, despite some optimistic assessments claiming just that.

If the energy bill does hit the floor this month, it is certain to become a virtual amendment magnet for a slew of issues ranging from global warming to oil windfall profits taxes to renewable portfolio standards and oil savings targets. But it is unclear just how focused, and successful, the Senate effort will be.

Senate Majority Leader Bill Frist (R-Tenn.), who gave Senate committee chairmen until Friday to offer their suggestions for energy initiatives, is determined to address the energy issue. Frist spokeswoman Amy Call yesterday said the effort might prove successful before the August recess if the Democrats do not obstruct it.

Domenici met late in the afternoon with key senators to work on an offshore drilling plan that would expand the area of offshore drilling in the Gulf of Mexico to include areas off Florida's west coast. With Gulf Coast senators (Florida excluded) already agreeing on a revenue sharing mechanism, the sticking point remains how to write in a no-drilling buffer between the Florida coastline and the area to be opened for drilling.

"We've just got to decide where Florida is," Domenici said yesterday. "We're reading the tea leaves on Florida."

The Senate Finance Committee has tentatively scheduled a markup next week of what lobbyists say is a modest energy tax package of no more than $20 billion in total costs. Candidates for inclusion in the tax package are breaks for renewable fuels, an extension of Section 45 tax credits for the renewable energy industry that was not addressed in the tax bill Congress approved earlier this year, and extensions for energy industry tax credits that were part of last year's Energy Policy Act.

Senate Commerce Committee Chairman Ted Stevens (R-Alaska) told reporters yesterday he would suggest the Senate take up auto fuel efficiency standards and price gouging legislation. There are many competing ideas on price gouging legislation, but Stevens, whose committee held a hearing on the issue earlier this year, has said he would pursue his own bill.

Finally, legislation to boost construction and expansion of oil refineries could be part of the energy effort, but Domenici, whose committee got jurisdiction over the House-passed refinery bill, said he did not plan to include the bill in his initial energy legislation plans. "Maybe round two," he said.

The only other refinery bill in the Senate is the House-passed refinery bill from last fall, which failed to pass the Senate Environment and Public Works Committee. A spokesman for EPW Committee Chairman James Inhofe (R-Okla.) said the senator "continues to work with his Senate colleagues" to push legislation that would increase domestic refining capacity.

Copyright 2006 E&E Daily. All Rights Reserved. Visit E&E Publishing for a free trial.

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