September 22, 2008

Energy Bill May Stall In Senate ; Mortgage Mess, Drilling Issue Could Keep Congress at Work

By Michael Coleman Journal Washington Bureau

WASHINGTON -- A massive mortgage bailout will command Congress' attention early this week, but New Mexico lawmakers said oil production and clean energy still could get boosts from Capitol Hill before lawmakers head home for November elections.

The Democrat-controlled House last week approved a bill allowing oil and gas drilling off of America's Atlantic and Pacific coastlines -- but only 50 miles offshore and beyond. Most of the estimated 8 billion barrels of recoverable oil is believed to be located within 50 miles of shore.

Senate staffers told the Journal last week that the House bill -- opposed by Republican Reps. Steve Pearce and Heather Wilson and supported by Democratic Rep. Tom Udall -- is likely dead on arrival in the narrowly divided Senate. The House legislation also included a section crafted by Udall that would require utilities to generate at least 15 percent of their power from clean energy sources by the year 2020.

Meanwhile, the Senate has been unable to agree on its own legislation to expand offshore drilling, despite polls showing that a majority of Americans -- fed up with high gasoline prices -- approve of increased domestic oil and gas production.

Congress is scheduled to recess on Friday until after the Nov. 4 elections, but the mortgage mess on Wall Street, coupled with a desire to do something on energy issues, could keep it at work in Washington into next week or beyond.

Congressional Democrats, many of whom have long opposed expanded offshore drilling, have shown a willingness to bend on the issue in this politically charged election year. But Republican and Democratic Senate staffers said last week that legislation allowing more offshore drilling is unlikely to clear both chambers of Congress and reach the president's desk before the election.

While lawmakers don't expect a bill to pass for offshore drilling, Sen. Jeff Bingaman, chairman of the Senate Energy and Natural Resources Committee, told the Journal the Senate probably will allow an annual moratorium on coastal drilling -- historically attached to a spending bill -- to expire. "It's my belief we'll have a (spending bill) that will not maintain the moratorium," Bingaman said. "The president's insistence that we eliminate that moratorium will have succeeded. It will eliminate the prohibition against drilling."

A Republican energy committee staffer said Republicans expect Democratic leaders to try to reinstate the moratorium after the election.

Bingaman said he expects the Senate to approve a tax package this week that would extend tax incentives for the wind and solar energy industries. "Sen. (Majority Leader Harry) Reid is optimistic that ... the House can be persuaded to go ahead and pass this," Bingaman said.

The Senate bill includes an eight-year investment tax credit extension for solar power projects and a one-year extension of a production tax credit for wind energy producers. New Mexico is home to an increasing number of wind and solar energy companies, and some of them have lobbied Congress aggressively for the extensions. The House energy bill approved last week also extended the wind and solar tax credits. Pearce and Udall, who are battling for the U.S. Senate seat that Republican Sen. Pete Domenici has held for 36 years, have sparred on energy issues throughout the campaign. Pearce said the bill approved by the House last week was a political ruse designed to give cover

to Democrats who have opposed more domestic oil drilling. He said the bill opens waters beyond 50 miles from shore, but that oil is extremely difficult to recover. "They limit the most productive drilling," Pearce said.

He also said the bill should have included a push for more nuclear power. "Nuclear power is not even mentioned in the bill," Pearce said.

Udall said the bill "was a very good step forward because we basically do it all," including more oil drilling and a push for more clean and renewable energy supplies.

"There is a push in this bill to expand domestic supply," Udall said. "This is a bill that moves us in the right direction. It's where our energy future needs to go."

Udall said he's optimistic -- even if many in the Senate aren't - - that Congress can still reach a bipartisan consensus on some kind of bill that does more than just extend wind and solar tax credits, which he also supports.

"I think there is a fair shot we could get something done by the end of the year -- both chambers and have the president sign it," Udall said.

Journal staff writer Jeff Jones

contributed to this report.

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