House passes bill to expand domestic oil and gas production but it will likely die in Senate

06 22, 2012 by The Times-Picayune

The House voted 248-163 today for legislation that encourages more domestic oil and gas production by scaling back environmental regulations and opening up more federal land for drilling.

But the measure, like almost all the energy and regulatory bills adopted by the GOP House, is likely to die in the Senate. Just for good measure, the White House put out a statement saying President Barack Obama would veto the bill if it ever reaches his desk.

Among those making a case for the bill was Rep. Charles Boustany, R-Lafayette, who said that while the Obama administration lifted the post BP spill moratorium on deepwater drilling it continues to "slow-walk" permits. The Republican bill, he said, would allow a needed expansion of domestic oil and gas production.

"This bill would go forward and help us to streamline that process so we can get American energy production back up online in the Gulf of Mexico and to develop our energy security needs," Boustany said. "We have the reserves. We have the opportunity."

But the streamlining and forcing the Environmental Protection Agency to consider the costs of regulations, instead of primarily whether they'll save lives by reducing toxic and dangerous emissions, sets a danger precedent, said Rep. Henry Waxman, D-Calif.

"Rather than basing smog standards on what is healthy for our children to breathe, this bill would require standards to be based on what industry says it will cost to reduce pollution," Waxman said. "This radical proposal will undermine decades of progress on cleaning up the air....The regulations blocked by this bill would create tens of thousands of jobs installing pollution controls and modernizing oil refineries."

For the second time in this session, Rep. Jeff Landry, R-New Iberia, persuaded his House colleagues to pass his amendment, increasing the maximum royalty payments due producing states from $500 million a year to $750 million a year, starting in 2023. That's six years after Louisiana and other producing states are to begin taking in 37.5 percent of royalty payments under 2006 legislation, known as the Gulf of Mexico Energy Security Act.

Rep. Ed Markey, D-Mass., objected.

"I would say to the gentleman from Louisiana that his State already won the baby in the king cake when the GOMESA giveaway was enacted back in 2006, and you're already entitled to $150 billion worth of revenue coming out of the Federal Government and heading your way," Markey said. "And so I just think it's time or your region to give a little back to the other 46 States in the Union that didn't benefit from that 2006 giveaway to you."

Landry, whose amendment was adopted 244-173, strongly defended it.

"The citizens of Louisiana have passed a constitutional amendment that dedicates all of the proceeds from offshore royalty to go to wetlands restoration, coastal restoration, and hurricane protection," Landry said. "This is buying us an insurance policy that the other 46 States, who I know have been so generous to help us when hurricanes ravage our coast, this helps to protect us. And I know that the gentleman from Massachusetts would love to protect the environment in Louisiana."

Sen. Mary Landrieu, D-La., the chief sponsor of the GOMESA legislation, praised the House vote to raise the yearly cap from $500 million to $750 million.

"I commend Congressman Landry for passing this important amendment to advance the goal of bringing more offshore oil and gas revenues to coastal states--particularly Louisiana--that host energy production," Landrieu said. "We need leaders who will work to lift the cap on oil and gas revenues for the benefit of our coastal communities."

But Markey and other Democrats complained that Republicans refused to schedule votes on amendments designed to encourage alternative energy development, and defeated an amendment that would have denied new permits to oil companies that benefited from a mistaken provision in a 1990s drilling permit that spared them from paying most royalties. The amendment, Democrats said, would help to reduce the deficit and ensure that all oil companies pay least modest royalty fees to develop oil and gas on federal property.

Republicans said that taxes or fees shouldn't be increased on oil companies at a time American desperately needs industry jobs.