Drill-safety bill stalls in revenue-sharing fight

A Senate Energy Committee effort to advance offshore drilling-safety legislation stalled Thursday in a battle over the fate of oil-production revenues, leaving no clear path forward for the bill that would codify tougher drilling standards.

Committee debate on the bill adjourned after the departure of most Republicans and Sen. Mary Landrieu (D-La.) — who hit turbulence in her bid to give coastal states a generous share of revenues — left the panel without the quorum needed to continue.

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It’s not clear what comes next for the bill. “I don’t know how we proceed,” said Committee Chairman Jeff Bingaman (D-N.M.) after the markup dissolved without action on the measure.

Thursday’s battle centered on Landrieu's and Sen. Lisa Murkowski’s (R-Alaska) plan to steer revenues from various types of offshore energy production — including marine renewable projects — to adjoining coastal states, expanding on oil-and-gas revenue sharing that Gulf of Mexico states won in a 2006 law.

Murkowski, in an effort to win support for the revenue-sharing amendment, offered a supplemental amendment that would funnel 12.5 percent of offshore energy revenues into a fund for state clean-energy projects.

But Bingaman, an opponent of revenue-sharing, parried the effort by questioning whether the funding would ever actually be used for such projects or would instead be subject to annual federal appropriations decisions.

“There is no assurance in anything I have seen that the money will be spent for these purposes,” he said.

The Murkowski amendment failed in a 10-12 vote, drawing the support of some coastal-state Democrats — Sems. Jeanne Shaheen of New Hampshire and Chris Coons of Delaware — while Republicans split on the measure.

Murkowski acknowledged there were questions about the language, calling it a “placeholder.”

Landrieu subsequently suggested that the committee delay the proceedings. That became inevitable when enough lawmakers — including Landrieu — left the room to leave the committee short of the eight present members needed to move amendments, and the 12 needed to vote on the full drilling-safety bill.

The underlying revenue-sharing amendment — a top priority for Landrieu and Murkowski — never received a vote.

Click here for links to our recent coverage of the revenue-sharing issue and the drilling-safety bill.

Bingaman argued that adding the revenue sharing and certain other amendments would jeopardize the bill’s political future in the Senate.

“I would ask the committee members to keep the purpose of the bill in mind,” Bingaman said at the opening of the markup, arguing the bill should be clear of “unrelated controversies.”

But Murkowski suggested the opposite, noting that addition of revenue-sharing would add needed support for the bill in the full Senate. “We are going to need those votes,” she said.

Proponents of revenue sharing argue that it is essential to compensate states for the impact of conducting drilling in federal waters off their shores. They also hope that revenue sharing will encourage more states to back offshore oil-and-gas development.

Opponents say it would take money from the Treasury, and environmentalists don't want provisions that encourage more states to back drilling off their shores.

The underlying offshore safety bill that stalled Thursday would put a congressional stamp on the restructuring of the Interior Department’s offshore drilling branch that has been under way 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.


—This post was updated at 1:01 p.m., 1:08 p.m, and 1:14 p.m.