Democrats compile new energy plan

Congressional Democrats are working on a proposal to enact provisions of a House bill that opens up new areas of the Outer Continental Shelf to oil drilling as part a stopgap government funding measure, now that passage of a standalone energy bill by the Senate appears unlikely.

Democratic leaders and their aides say the debate over the Bush administration's proposed $700 billion Wall Street bailout package is eclipsing legislation, such as the energy bill, that once had top priority on the Senate's calendar.

Democrats are circulating a discussion draft of a "continuing resolution" to temporarily fund the government that includes drilling provisions House Democratic leaders got passed in their energy bill last week. They call the energy bill a compromise because, while it lifts the drilling ban, it limits offshore drilling to at least 50 miles from U.S. coasts. And the bill would repeal $18 billion in oil industry tax breaks and promote development of alternative sources of energy.

With oil prices rising over $100 a barrel, the risk for many Democrats is that Republicans will use inaction on energy and drilling as a club in the fall campaign.

Monday's surge in oil prices to about $120 a barrel could also move the energy issue back up the campaign agenda.

Majority Leader Harry Reid said last week he planned to use the energy bill as a legislative foundation for a vote on drilling. A proposal from a bipartisan "Group of 20" senators -- 10 from each party -- had stalled, but Republicans had drafted their own alternative, as had Sen. Jeff Bingaman, chairman of the Energy and Natural Resources Committee.

"It's looking more and more that energy is getting squeezed off the Senate floor this week...and less and less likely," said David Marks, spokesman for Sen. Bingaman.

"It's going to be difficult with what we have going on," he said Monday.

Sen. Bingaman last week canceled the unveiling of his proposal, and Mr. Marks said there was no revised schedule to reveal the chairman's plan.

Under House Speaker Nancy Pelosi, Democrats rallied around a bill that allows new oil and gas leases starting 50 miles from shore, with states required to approve leases between 50 and 100 miles. States wouldn't be permitted to share in the revenues. The bill also takes a step toward opening up federal oil-shale regions for development, as long as states authorize the leases, and would order the government to tap the nation's Strategic Petroleum Reserve.

The GOP has called the House bill "a sham," saying that limiting drilling to 50 miles offshore excludes the easiest-to-access oil and gas, and without sharing royalty revenues with the states, it is unlikely to procure assent by the state governments that have the ability to opt in to the leasing program.

Congress is scheduled to recess later this week, when lawmakers are planning to head home for the final run-up to the November elections. If the energy bill is sidelined before the recess, it's likely that no major energy bill will be passed before the next Congress, when Democrats hope to hold a larger majority and perhaps the White House.

Author: Jo Amey