LNG, OCS Holding Up Oil and Gas Title of Senate Energy Bill

Intelligence Press

Senate negotiations on the oil and gas title of the energy bill are being stymied by two key issues -- jurisdiction over the siting of liquefied natural gas (LNG) import terminals and drilling on the federal Outer Continental Shelf (OCS), according to Capitol Hill sources.

Negotiators still are working on four titles (including oil and gas), and a portion of the nuclear section of the bill. They have completed negotiations on eight full titles and part of the nuclear title. Sen. Pete Domenici (R-NM), chairman of the Senate Energy and Natural Resources Committee, and Sen. Jeff Bingaman of New Mexico, ranking Democrat on the panel, have said mark-up of the completed titles will begin May 17 and will run through May 19. Mark-up of the still-unfinished titles has been preliminarily scheduled for the following week, they said.

Negotiations over LNG and OCS "haven't been closed out yet. Those two issues have always been difficult" because lawmakers' positions are normally dictated by geography rather than party affiliation, said William Wicker, Democratic spokesman for the Senate energy panel.

He said that committee staff negotiators have made "terrific progress" on a number of areas in the oil and gas title, but the big issues -- such as OCS and LNG -- often have to be resolved by the committee members themselves.

Wicker noted that the stand-alone natural gas legislation, offered by Sens. Lamar Alexander (R-TN) Tim Johnson (D-SD) in early April, "has certainly been the subject of most of the negotiation."

The stand-alone bill seeks to tame gas prices by giving coastal states the opportunity to opt out of the federal moratorium on offshore oil and gas leasing and potentially freeing up gas-rich Lease 181 in the eastern Gulf of Mexico for leasing. It also would give the Federal Energy Regulatory Commission, not the states, the exclusive authority over the siting of LNG terminals. But it does not give the Commission additional authority to grant eminent domain, or the power to completely override a state with respect to the Coastal Zone Management Act, the Clean Air Act or the federal Water Pollution Control Act (see Daily GPI, April 7, May 11).

In letters delivered Wednesday, more than 50 companies and associations called on individual senators to "encourage Chairman Domenici to incorporate the Alexander-Johnson bill into a comprehensive Senate [energy] bill, and work to pass such a bill to assure that the near- and long-term needs for competitively priced natural gas for a growing U.S. economy can be met." (Copyright 2005 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.