OVERNIGHT ENERGY: Senate GOP plan takes center stage in oil battle

Wednesday’s Big Story: The Senate will vote on a GOP plan to expand offshore drilling, the second stage of a two-day political messaging showdown between the parties.

The GOP plan — which lacks the needed 60 votes — mirrors House-approved bills that set deadlines for several lease sales and mandate fast action on industry drilling permit requests. The vote will come a day after the Senate turned back a Democratic plan to repeal billions of dollars worth of industry tax breaks.

The dueling bills — and, if the GOP plan tanks as expected, dual failures — set the stage for continued sparring on energy prices, drilling and industry profits in coming weeks and months.

Democrats, who fell well short of the 60 votes needed to advance their plan, are vowing to continue fighting to strip industry tax breaks during wider deficit talks with Republicans and the White House.

NEWS BITES:

Senate rejects oil tax-repeal bill

The Senate voted to block a procedural motion necessary for consideration of a bill to slash billions in oil industry tax breaks in a 52-48 vote. The motion required 60 votes for passage.

But Senate Democrats vowed Tuesday to revive the measure as part of high-stakes negotiations on the budget and debt ceiling.

Two Republicans – Maine Sens. Olympia Snowe and Susan Collins -- voted for the motion, while three Democrats – Sens. Mary Landrieu (La.), Ben Nelson (Neb.) and Mark Begich (Alaska) -- voted against the motion.

More on the vote here.

Hutchison will continue push to extend Gulf leases for a year

Sen. Kay Bailey Hutchison (R-Texas) said Tuesday she plans to continue to pursue a bill to extend Gulf of Mexico leases by one year even after President Obama announced his intention to lengthen leases affected by last year’s deepwater drilling moratorium.

Hutchison said she is cloudy on the details of the proposal announced by President Obama Saturday, noting that the president “wasn’t specific about covering everyone.”

“That’s why I’m pursuing the legislation, to make sure that there’s a one-year extension for everyone,” she told The Hill.

But Hutchison praised the Obama’s offshore drilling push broadly.

“I think it’s a move in the right direction because what he’s saying is, ‘I now understand there has been a real devaluation of the lease because you haven’t had the ability to use it,’” she said.

Bromwich: Still working out details of Gulf lease extension


Bureau of Ocean Energy Management, Regulation and Enforcement Director Michael Bromwich said Tuesday that his agency is still working out the time element for the extension of Gulf leases.

Obama announced Saturday that he would extend Gulf leases affected by last year’s moratorium on offshore drilling.

“We’re working on developing clearer, cleaner criteria that will probably be easier for us to grant some additional lease extensions. But so far, we have granted all those we have received,” he told reporters after testifying before the Senate Energy and Natural Resources Committee.

Bromwich said BOEMRE has granted lease extensions to the 10 companies that have requested one.

“We’ve been extraordinarily liberal in granting extensions,” he said.

BP-ConocoPhillips Alaska gas pipeline plan collapses ...

The Wall Street Journal reports that BP and ConocoPhillips are abandoning plans to build a $35 billion natural gas pipeline because the demand isn’t there.

“Since 2008, when the venture, known as Denali, began working on the project, natural-gas prices have plunged. New York Mercantile Exchange gas futures hit a peak in mid-2008 in the midst of a wide energy rally and have since fallen by more than half,” the paper reports.

“The company estimated it had so far devoted $165 million and 760,000 man-hours to the pipeline project, which would have ferried gas from Alaska's North Slope to Canada and the lower 48 states in the U.S.,” the story states.

... and Begich says Congress should help

Begich expressed disappointment that the plan collapsed, and said growing U.S. demand for natural gas could make the project economical in the future.

“There’s no doubt Alaska needs a gas line for 2020 and beyond to attract the investment dollars that will be necessary to produce more oil. I hope the State and the producers can all work together to move an Alaska gas line forward in the future. I stand ready with the rest of the Alaska Congressional Delegation to move increased loan guarantees forward to help secure a pipeline project,” he said in a statement.

ON TAP WEDNESDAY:

Upton, Whitfield to push for drilling on Gulf tour


House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) and several other lawmakers will hold a press briefing in New Orleans to discuss their visit to the Gulf of Mexico, which includes a tour of a deepwater rig.

Chu heads for Senate to defend Energy Department budget plan


Energy Secretary Steven Chu will appear before the Senate Appropriations Committee panel to defend his agency’s fiscal year 2012 budget plan.

Cantwell, Rubin headline energy forum

Sen. Maria Cantwell (D-Wash.) and Clinton-era Treasury Secretary Robert Rubin are among the participants at a Brookings Institution event titled “America’s Energy Future: New Solutions to Fuel Economic Growth and Prosperity.” More here.

Nuke regulators to probe seismic risks

The Nuclear Regulatory Commission will hold a public meeting on seismic risk evaluations for nuclear power plants. More here.

NOAA chief to headline oceans forum

The Woodrow Wilson International Center for Scholars hosts a forum on ocean health that features Jane Lubchenco, head of the National Oceanic and Atmospheric Administration. More here.

IN CASE YOU MISSED IT…

Here’s a quick roundup of Tuesday’s E2 stories:

- White House contender Huntsman: Listen to climate scientists
- Senate to vote on bills repealing oil tax breaks, expanding offshore drilling
- McConnell pans Obama drilling plan
- CBO says taxing cars by the mile could raise money for highways
- Salazar outlines administration wish list for drilling-reform bill
- In lead-up to vote, Reid argues oil bill could lower gas prices
- Conservative group: Dems’ oil bill violates tax pledge
- Taxpayers for Common Sense: Bill to repeal oil tax breaks doesn't go far enough
- White House supports Senate bill to end 'wasteful subsidies' to oil companies
- Reid 'confident' debt agreement will include repeal of oil tax break
- Vitter blasts Republican drilling bill
- Sen. Landrieu calls Senate oil-tax vote 'entertainment'
- Sen. Murkowski says Democrats are 'punishing' Big Oil for making money
- Senate Dems seek FTC investigation into alleged gasoline price fixing
- DiCaprio: End oil subsidies
- White House slams Senate GOP drilling bill but again withholds veto threat


Please send tips and comments to Ben Geman, ben.geman@thehill.com, and Andrew Restuccia, arestuccia@thehill.com.

Follow us on Twitter: @E2Wire, @AndrewRestuccia, @Ben_Geman

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