Wednesday, 5 May 2010

Disaster Dims Odds of Energy Bill Compromise

The oil slick spreading through the Gulf of Mexico will prompt Congress to establish new regulatory, safety and technological requirements that could impede further off-shore oil drilling, the White House's top energy official said Tuesday.
But lawmakers said the catastrophic spill could further dim the White House's hopes for securing legislation aimed at reducing U.S. consumption of oil and other fossil fuels, by making it impossible to forge a compromise that includes expanded undersea drilling.
White House energy and environment adviser Carol Browner, in an interview, didn't say whether President Barack Obama would modify his own proposal to expand oil exploration on the Atlantic and Gulf coasts. Specific policy changes will have to await results of a 30-day review of the unfolding disaster due by the end of May, Ms. Browner said.
Two weeks after BP PLC's Deepwater Horizon rig exploded in flames before sinking and leaving a well gushing into the sea, Washington has begun grappling with the oil spill's implications beyond the Gulf.
Key Democrats said the spill should drive Congress forward on legislation to address climate change and promote alternative energy sources and electric cars. They also have called for regulations that would require more-robust safety technology on offshore rigs, such as remote-control acoustic shut-off switches.
Jack Gerard, president of the American Petroleum Institute, said "congressional overreaction" on the regulatory front could make oil exploration in some areas economically prohibitive. "What's most important is that we get the facts before we move. We should not legislate in a vacuum based on speculation."
But some Democratic and Republican senators said the incident makes progress on energy and climate legislation less likely. Coastal senators, such as Democrats Robert Menendez of New Jersey and Bill Nelson of Florida, vowed to block expanded drilling in any bill. Senate Minority Whip Jon Kyl (R., Ariz.) said legislation can't move forward without three "pillars": expanded oil and gas exploration, more nuclear power and a price on carbon-emissions in exchange for the first two.
"At least temporarily, this has knocked one of the legs of the stool off to the side, so my guess is that nothing proceeds at the moment," Mr. Kyl said.
Mr. Nelson agreed, saying, "It makes it more difficult to get 60 votes," the number to break a Senate filibuster. "You're not going to get offshore drilling in an energy bill."
White House officials were careful not to antagonize Republicans. "Oil is going to be a part of our energy mix for some time to come," Ms. Browner said, a position backed Tuesday by House Speaker Nancy Pelosi (D., Calif.), a frequent critic of the oil industry. Ms. Browner said the spill is likely to pull Republicans to the negotiating table who otherwise wouldn't be there.
Progress on energy has been stymied for months because only one Republican, Sen. Lindsey Graham of South Carolina, has been willing to negotiate on legislation designed to promote alternative sources, in part by raising the cost of fossil fuels.
As the White House pressed for a policy response, Democrats were pushing a political one. Both the Florida Democratic Party and the Democratic Senatorial Campaign Committee began organizing and fund-raising around the oil blowout.
Mr. Kyl suggested a different response: drill in Alaska's Arctic National Wildlife Refuge, a proposal long blocked by Democrats. "You're not in 5,000 feet of water. You've got a pipeline nearby, and you've got experience drilling in that area just a few miles away," Mr. Kyl said.
The White House, meanwhile, continued its efforts to detail the steps officials are taking to head off environmental catastrophe in the Gulf region and hold BP financially and legally liable for clean-up costs and economic damages. Cabinet officers fanned out on Capitol Hill Tuesday to brief lawmakers.
In Louisiana, the president's Sunday visit buoyed support among some locals.
"I'm a lifelong Republican…I've met with many presidents over the years, and this one wants to get things done. I've never seen anyone come in and take charge like that before," Plaquemines Parish president Billy Nungesser said of Mr. Obama's meeting with him and other Louisiana officials.—Corey Dade contributed to this article.
Write to Jonathan Weisman at