Drilling, ethanol fights loom on House CR

Markey’s plan denies new leases to oil companies that are entitled to unlimited royalty waivers — or “royalty relief” — on deepwater leases issued between 1996 and 2000.

A mid-1990s law meant to spur costly deepwater drilling granted “royalty relief” to Gulf producers.

Under the program, the waivers apply until prices exceed a pre-determined threshold. But in a now-infamous and expensive goof, the Department of Interior left the price ceilings out of leases issued in 1998 and 1999, thereby allowing royalty-free production at any oil and natural-gas price.

An appellate court decision in early 2009 found the Interior Department cannot apply the price-based limits on royalty waivers for any leases issued between 1996 and 2000.

The Government Accountability Office estimated in 2008 that without the price ceilings on leases issued between 1996 and 2000, foregone federal royalty revenue could reach $53 billion over 25 years.

Markey’s amendment to the fiscal year 2011 spending bill would prevent the Interior Department from using fiscal year 2011 funding to issue new leases to companies holding existing leases that allow unlimited royalty waivers.

Markey and other Democrats have floated bills in recent years to address the unlimited waivers.

But none have become law amid opposition from the industry and Republicans, who say the measures would shake confidence in the security of federal contracts.

Markey’s amendment isn’t the only drilling-related matter slated for a vote on what’s likely the last day of debate on a continuing resolution.

Lawmakers are also due to vote on a plan by Rep. Steve Scalise (R-La.) that’s designed to force Interior to speed up issuing new offshore drilling leases. Republicans and pro-drilling Democrats are furious that Interior has not resumed issuing deepwater leases since the BP spill, and shallow-water permitting has slowed as well.

His amendment states that none of the funding in the spending bill “may be used to further delay the approval of any exploration plan, development operations coordination document, development production plan, application for permit to drill, or application to sidetrack for purposes of Outer Continental Shelf energy exploration.”

Other amendments slated for a vote include Rep. John Sullivan’s (R-Okla.) measure to prevent the Environmental Protection Agency from implementing a program that allows higher ethanol blends in gasoline.

Elsewhere, lawmakers will consider Rep. Blaine Luetkemeyer’s (R-Mo.) amendment that blocks U.S. funding for the United Nation’s Intergovernmental Panel on Climate Change, as well as GOP amendments to block tougher regulation of mountaintop mining, among many others.

But it was not clear late Friday morning if all of the scores of amendments scheduled for consideration will indeed receive votes.

This post was updated at 11:52 a.m.