Drilling to dominate remaining weeks of session

The issue of expanding offshore drilling is expected to dominate the remaining weeks of the session as lawmakers return from a monthlong recess with an eye on gaining an advantage on energy issues heading into the fall campaign.

During the recess, House Republicans returned to Washington off and on to continue to debate drilling amongst themselves on the floor – they all agreed Congress should lift longstanding prohibitions on production.

{mosads}The protest, as they called it, was designed to pressure House Speaker Nancy Pelosi (D-Calif.) into allowing a vote to end a broad moratorium on drilling offshore and in the Arctic National Wildlife Refuge.

But Pelosi and her Democratic colleagues have retreated from that stance. Apparently chastened by voter complaints and growing support within their caucus for policies that would promote additional production, Democratic leaders have instead worked in the past few weeks to craft a compromise plan that would couple some limited expansion of drilling with the repeal of tax breaks for oil companies. Democrats would use the new revenue to promote the development of renewable energy.

The actual legislation could be revealed as early as this week. Republicans are likely to object to its limited scope in terms on what new areas the bill would provide oil and gas companies access to.

Much of the focus these remaining weeks could fall on the so-called “Gang of 10” proposal that has already been introduced. That measure would open up new areas in the eastern Gulf and the Atlantic seaboard off the Southeastern coast to drilling but also increase taxes on oil and gas companies. Six more co-sponsors signed on to the bipartisan bill in August.

But even as the two sides inch closer to one another, few energy lobbyists seem to think there is any real chance for compromise. Republicans made it clear at a press conference last week in St. Paul at their nominating convention that they want a vote on the House floor to open up everything, all areas offshore and in the Arctic National Wildlife Refuge.

They also oppose the repeal of tax breaks for the oil and gas industry, although they would dedicate royalties from new development to the development of renewable energy. And Republican lobbyists acknowledge few party leaders will want to give up on the one issue relating to the economy where they feel they hold an advantage with voters.

Many environmental groups, meanwhile, remain staunchly opposed to any expansion of drilling opportunities. Democrats, with some estimates from nonpartisan energy statisticians at the Energy Department, have argued that drilling offshore and in other areas won’t provide any immediate relief at the pump. Republicans argue the policy shift could provide a market signal that would have a positive effect.

The issue of drilling could also come up as Congress debates a continuing resolution to continue to fund the government. The congressional moratorium on drilling has been passed annually by Congress as part of the spending bills. Doing so this year, after gas prices rose above $4 a gallon for the first time, could prove tricky.

But it won’t all be drilling. Congress could also take up the extension of renewable energy and other tax credits in the remaining three weeks of the sessions. Democrats may also push a second stimulus package to provide voters some economic relief as the  economy struggles.