Potential Senate Deal Could Open Gulf Coast, Allow Kempthorne Confirmation

Gulf Coast lawmakers are hammering out details of a plan that could open a significant portion of the Gulf of Mexico to oil and gas drilling and pave the way for the Senate to confirm Dirk Kempthorne as secretary of the Interior.

Sen. Mary Landrieu (D-La.) told Greenwire that senators "against all odds" are nearing a deal that would open up at least 75 percent of the Lease Sale 181 area in the gulf and provide revenue sharing for a coastal restoration fund.

If a deal is reached, Landrieu would likely release her "hold" on the Idaho governor for Interior secretary. "If this is worked out in a positive way, I would be very inclined to lift my hold," Landrieu said.

Sen. Bill Nelson (D-Fla.) who also has a hold on Kempthorne, would make a decision that "depends on the specifics" of any Gulf of Mexico deal, spokesman Dan McLaughlin said.

To bring aboard Florida lawmakers, the proposal would provide a temporary 125-mile buffer off the coast, which one source said would last until 2020. "It would give Florida some time to make decisions on what it wants to do next," Landrieu said.

Senate Majority Leader Bill Frist (R-Tenn.) is working on a package of presidential nominees to be confirmed before the Memorial Day recess that could include Kempthorne.

Frist may not have to file for cloture on the Kempthorne nomination, according to Sen. Larry Craig (R-Idaho). "We think we can get there" without cloture, Craig said yesterday.

A Frist aide confirmed that Kempthorne is among the nominees under consideration, but the aide would not comment on others on the list. Kempthorne has already cleaned out his Boise office in anticipation of his confirmation (E&ENews PM, May 23).

The Senate Energy and Natural Resources Committee approved Kempthorne's nomination by voice vote earlier this month, but Landrieu and Nelson have used a procedural hold to prevent the full Senate from voting on confirmation.

Landrieu is seeking White House assurance it would support coastal impact assistance or revenue sharing from offshore oil and gas lease sales. Landrieu has long complained that interior states receive 50 percent of the revenue from oil and gas exploration on public lands, while coastal states such as Louisiana do not, even though they host much of the infrastructure for resource distribution and energy production (E&E Daily, May 11).

Nelson is upset with the administration's plan to sell oil and gas leases in the Lease Sale 181 area. Interior oversees the Minerals Management Service, which earlier this year released a draft five-year plan for oil and gas leases on the OCS that proposes leasing 2 million acres in the Lease Sale 181 area.

Major hurdles

Senate plans to allow drilling in a gas-rich area in the eastern Gulf of Mexico -- called the Lease Sale 181 area -- remain up in the air. Senate Energy Committee Chairman Pete Domenici (R-N.M.) yesterday said Florida lawmakers are seeking too many restrictions to make the plan viable.

Domenici's bill -- offered with Sen. Jeff Bingaman (D-N.M.), the committee's ranking member -- would open nearly 3 million acres of the 181 area to drilling but would not come within 100 miles of Florida. Domenici told reporters yesterday that Florida lawmakers are seeking a larger coastal boundary.

Sources on and off the Hill say the deal under consideration would include leasing in a smaller portion of the 181 area than Domenici and Bingaman's legislation would allow, but would also open a large area south of 181 that is currently covered by offshore drilling bans.

But the deal faces major hurdles, including convincing Domenici and Bingaman to back it. Domenici said yesterday Florida lawmakers are seeking too much to make the package "viable," while Bingaman has opposed sharing offshore revenues with states. "I don't support revenue sharing as they described it to me," Bingaman said today.

One Senate source close to the talks, however, said Bingaman's position is unclear, noting that he has not endorsed the revenue split, but has not sought to kill the talks outright either. This source expressed hope that getting Nelson to back the package could bring along enough Democrats to overcome Bingaman's opposition.

Nelson and Sen. Mel Martinez (R-Fla.) have offered legislation providing broad coastal protections for Florida that would leave only 740,000 acres of the 181 area unprotected. Domenici and Bingaman's 181 bill opens about 3 million acres, while the Senate source estimates that 2 million acres of the 181 area would be available under the compromise plan.

This source adds that if an agreement can be reached between the Florida lawmakers and the other Gulf coast senators, than they may be able to make their plan the only workable choice. "It has almost a Gang of 14 effect, if you will," this source said, referring to the bipartisan compromise last year that averted a showdown over the right to filibuster judicial nominees.

But a lobbyist representing industry advocates of wider drilling was critical of the plan. "We are skeptical about taking that much production off the table for that length of time," said the lobbyist. The source expressed doubts about its viability and does not believe the plan could gain traction without both Domenici and Bingaman's blessing. Also, the source added that the potential gas reserves in the area south of 181 are uncertain.

A meeting among Gulf Coast lawmakers is scheduled for tomorrow, Sen. David Vitter (R-La.) said yesterday.

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