Democrats to Offer a Mix of Proposals

by Paul Kane

WASHINGTON - Congressional Democrats, balancing political reality against a policy they have long opposed, are on the cusp of approving legislation that would open the Atlantic and Pacific oceans to oil drilling as close as 50 miles offshore.

With votes scheduled this week in the House and Senate, Democrats have essentially given up defending the current ban on drilling within 200 miles offshore along both coasts. Instead, led by House Speaker Nancy Pelosi (D-Calif.), they are offering a mix of proposals that would allow drilling, with the waters off Massachusetts, Virginia and Georgia most likely to be the first affected.

Environmentalists and industry analysts disagree over the impact the various legislative proposals would have on oil production, with industry experts contending that the most precious reserves still would be off-limits. But both sides agree that -- because of the politics of $4-a-gallon gasoline this summer and a pending legislative deadline -- the nearly 40-year drilling ban is in jeopardy.

"It's in deep, deep trouble. I won't pronounce it dead, but it's in deep trouble," said Warner Chabot, a vice president of the Ocean Conservancy, an environmental group opposed to drilling.

House and Senate Democrats have been assembling different proposals for the past few weeks after absorbing months of Republican criticism as gas prices soared. Under pressure from moderate Democrats fearful of November election losses, Pelosi took the first formal step Wednesday by unveiling a proposal that would open the Atlantic and Pacific coasts to drilling at least 100 miles offshore. If governors and state legislatures agree, drilling off each state's coast would be allowed 50 miles from shore.

Pelosi had previously suggested opening only portions of the southeastern Atlantic coast and some of the eastern Gulf of Mexico to drilling, but ultimately offered to allow drilling off both coastlines. The eastern gulf off Florida's west coast would remain off-limits.

Under the Pelosi bill, scheduled for a vote Tuesday, the federal government would not share royalties with the states, devoting the money instead toward federal funding for renewable energy resources. Taxes on oil companies would be increased, with that revenue also going to alternative energy sources.

A separate proposal, developed by about 20 Senate Democrats and Republicans, also would move the drilling boundary to 100 miles offshore, with states given the option to set it at 50 miles. But under that plan, new Atlantic drilling would be limited to Virginia, North Carolina, South Carolina and Georgia. The Senate plan would allow no drilling in the Pacific.

In a key difference with Pelosi's bill, the Senate legislation would allow new drilling off Florida's west coast.

Some industry experts question the effect of the proposals, citing federal studies that show that more than 80 percent of known oil reserves are inside the 50-mile limit and therefore unavailable. Very little is known about oil reserves beyond 100 miles. Waters off almost the entire Pacific coast -- where all three governors oppose drilling at the 50-mile barrier -- is considered too deep for drilling 100 miles offshore.

"You would just open a door to an empty room at the end of a very long hallway," said Brian Kennedy, spokesman for the Institute for Energy Research, an organization funded by the oil industry. Kennedy also said that, without some sort of revenue sharing for state governments, there would be little incentive for states to approve additional drilling.

With revenue sharing, Virginia and Georgia would quickly approve offshore drilling at the 50-mile mark, Kennedy and some environmental experts predicted. The biggest target for new drilling at the 100-mile mark would be in the Georges Bank, off the coasts of Massachusetts, Maine and New Hampshire, where cod fishing was once the dominant industry. Oil and natural gas already are extracted not far away, in Canadian waters.

The most sought-after area, however, is the eastern Gulf of Mexico near Florida's western coast. Drilling rigs already operate in the gulf off Houston, New Orleans and Mississippi, giving oil producers a near-certain guarantee of finding oil near Florida. It also would be less costly for producers to move their production and delivery systems to the other side of the gulf than to place new rigs in previously unexplored regions of the Atlantic or Pacific.

Sen. Bill Nelson (D-Fla.) has vowed to filibuster any legislation that would open the waters off Florida's western beach resorts, to protect his state's tourism industry and the military testing areas for Navy and Air Force bases in the region. "If they want to get something done, they have to deal with me," Nelson said in an interview Friday.

Republicans have been skeptical about Pelosi's proposal, because environmental groups such as the Sierra Club have endorsed it as "a chance for clean energy gains that would represent a giant step in solving our energy crisis."

Many lawmakers privately predict the energy legislation will stall in parliamentary gridlock, but Congress has its own statutory deadline to deal with by Sept. 30. At that point, the annual congressional moratorium on offshore drilling expires. President Bush lifted the executive ban on offshore drilling early this summer.

That means Pelosi has barely two weeks to forge a compromise or face the end of the moratorium. That would allow drilling within three miles off all coasts. Faced with such a predicament, Democrats are increasingly likely to add their new drilling legislation to a catchall spending bill that will fund most of the government into next year.

Such a decision would dare Bush to veto the legislation and shut down the federal government over the GOP's preferred drilling plan. But if Republicans accepted the compromise, it would lead to increased offshore oil drilling under the watch of a Democratic Congress, a concept that was unfathomable just six weeks ago.