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Compromises Threaten Energy Bill's Chances in Senate

By CQ Politics, CQ Politics - June 13, 2009

After more than two months of horse-trading and compromises, a Senate commmittee is on the brink of approving energy legislation with something for just about everybody to hate.

Jeff Bingaman , D-N.M., chairman of the Senate Energy and Natural Resources Committee, hoped to complete work on the draft bill by now but postponed a vote until next week because of scheduling conflicts.

The bill, intended to be the main Senate vehicle for President Obama's energy agenda, would boost the amount of electricity generated from renewable sources, expand offshore drilling in the Gulf of Mexico and streamline siting of long-distance power lines.

But many of the compromises struck to advance the bill in committee threaten to blow up when the measure reaches the Senate floor.

Language that would allow offshore drilling in a vast tract of the eastern Gulf of Mexico was designed to curry support from pro-drilling Republicans, but it has alienated Bill Nelson of Florida and other conservation-minded Democrats.

And without a provision "” rejected in committee "” allowing coastal states to share in the royalties paid for drilling in federal waters, the expanded drilling may not be enough to bring the Republicans along.

Meanwhile, no one seems satisfied by the renewable-electricity mandate, the centerpiece of the bill. The legislation would require utilities to produce 15 percent of the nation's power from renewable sources, such as wind and solar, by 2021, of which 4 percent could be met by increasing energy efficiency.

To gain the support of Democrats from states with few wind or solar resources, Bingaman agreed to water down the mandate from the 25 percent standard sought by President Obama and the 20 percent by 2020 standard in climate change legislation (HR 2454) approved by the House Energy and Commerce Committee.

Despite the concession, most Republicans remain staunchly opposed to the mandate. But the renewable-energy industry, along with Democrats tied to the environmental movement, say it is now too weak to create real incentives for an expansion of renewable-energy production.

Lisa Murkowski of Alaska, the Energy panel's ranking Republican, has expressed reservations about the renewable electricity standard but has said she could reluctantly support it if the broader bill includes strong language to expand domestic oil and gas production.

She and other Republicans say language allowing coastal states to share offshore-drilling revenue is critical to expanding offshore production because it would provide an incentive for states to support drilling off their coastlines. A 2006 energy law (PL 109-432) that expanded drilling in the Gulf allows four coastal states to share some of the revenue.

But Bingaman adamantly opposes expanding revenue sharing, arguing that offshore resources belong to the entire country and that any revenue should be dedicated to reducing the deficit.

The 2006 legislation was enacted after senators agreed to ban drilling too close to Florida's shorelines. Nelson said he voted for it after brokering a deal with then-Minority Leader Harry Reid , D-Nev., to carve a buffer zone off of Florida.

Nelson said the language in the new energy bill would break that agreement, and he has threatened a filibuster to block it. Nelson took to the Senate floor Thursday to condemn the legislation, complete with maps and photographs designed to illustrate what he described as a threat to Florida's tourist industry and interference with offshore military training areas.

"We will kill this because there are too many of us who are concerned about this,"� Nelson said.

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