Hopes Wane for Pre-election OCS Deal

A House-Senate agreement on offshore oil and gas drilling before Congress leaves town appears increasingly unlikely, with Sen. Mary Landrieu (D-La.) yesterday warning that a drilling deal is "dead" unless House members drop their push for new oil and gas leasing outside the Gulf of Mexico.

Lawmakers on both sides of the Capitol say talks have continued this week in an effort to reach a deal before lawmakers leave at the end of the week until after the midterm elections. Members are not ruling out a breakthrough.

But when asked by reporters about the issue, House Majority Leader John Boehner (R-Ohio) yesterday appeared skeptical and said negotiators lack the "urgency" needed to reach a deal. "I am going to be a little careful here since we are talking about the Senate, and we are trying to get a bill, trying to get some agreement," he said.

"Around here, for something to happen, somebody has to make it happen. Nothing happens on its own around here," Boehner said. "And so we are trying to get people together. There have been a lot of conversations, but there hasn't been the urgency I think there needs to be if were going to come to an agreement."

Sen. Pete Domenici (R-N.M.), the chair of the Senate Energy Committee, also appeared gloomy yesterday about the prospects for a deal, but he cautioned to reporters that lawmakers have not yet given up.

There are huge differences between outer continental shelf oil and gas leasing bills passed by each chamber. The Senate bill opens 8.3 million acres of the Gulf of Mexico to new oil and gas leasing, while the House measure is much broader, expanding gulf access but also relaxing offshore leasing bans that now cover most coastal areas outside the gulf.

While Boehner appeared to pin blame on the Senate, Landrieu -- a cosponsor of the Senate bill -- said House members' insistence on a broader drilling plan is to blame for the impasse. Both bills would share oil and gas production revenues with states that have drilling off their shores. Winning coastal revenue sharing is a longstanding Landrieu goal.

Senate leaders have repeatedly said their bill is the broadest measure the Senate is capable of passing. Landrieu noted House members have been holding out for including leasing in some areas outside the gulf as part of a final deal.

"This insistence is holding back our chances for a fair compromise, and until the House moves off this position, the deal is dead," she said in a statement released yesterday. "As soon as they give up this unmovable cause, all things are possible, including substantial additional funding in the first 10 years for coastal restoration and conservation programs."

Speaking to reporters yesterday, Landrieu said the House push for a broader package that sets policy for areas outside the gulf is fatal to efforts to win revenue sharing for Louisiana. A national drilling bill, she said, "is not going to move this week, not going to move in the lame duck, and is probably not going to move next year."

Mary O'Driscoll and Lucy Kafanov contributed to this report

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