White House: Revenue-sharing could ‘jeopardize’ drilling safety bill

The White House on Tuesday signaled its opposition to amending Senate offshore drilling safety legislation with provisions that would give coastal states a sizable cut of revenues from oil-and-gas production in federal waters off their shores.

The Senate Energy and Natural Resources Committee is marking up the drilling safety bill Thursday, and Sens. Mary Landrieu (D-La.) and Lisa Murkowski (R-Alaska) are planning to offer a revenue-sharing amendment.

But a White House official signaled Tuesday that the administration doesn’t want the state revenue plan added to the measure at the moment. 

“The Administration has been working closely with the sponsors of the bill to provide technical assistance during the drafting, and has concerns about any amendment that could jeopardize a clean bill at this point in the process,” the official said.

“We also have specific policy concerns about this amendment,” the White House official added.

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The White House position places political hurdles in front of the revenue-sharing push by Landrieu and Murkowski, who is the energy panel’s top Republican, even as they’re broadening the revenue plan to win more support.

Gulf of Mexico states already won oil-and-gas revenue-sharing in a 2006 law, ensuring a 37.5 percent cut from certain leases, but the bulk of it does not begin until 2016. Landrieu has said that the program should be sped up.

Energy committee Chairman Jeff Bingaman (D-N.M.) – who opposes offshore revenue-sharing – and Murkowski are jointly backing the underlying bill to improve drilling oversight in the wake of the BP spill.

The bill would put a congressional stamp on the restructuring of the Interior Department’s offshore drilling branch that has been underway since last year’s months-long spill that dumped several million barrels of oil into the Gulf of Mexico. 

It also includes a suite of measures to toughen oversight of exploration and drilling plans, such as third-party certification of blowout preventers and other equipment, and other beefed-up safety standards.

Interior has already toughened its drilling safety rules under its existing authority and vows that more changes are on the way. But the broad Senate bill also includes measures that need Capitol Hill approval, such as increased penalties for flouting safety rules and more time for federal review of exploration plans.