Dems' Energy Proposals Stymied

Speaker Nancy Pelosi hoped to send House Democrats home for the Fourth of July recess with a series of votes that would show they’re serious about easing the pain at the pump.

Their wish list included legislation giving the federal government more authority to crack down on price-gouging by oil companies and smaller vendors, a bill requiring energy producers to relinquish any land not currently being tapped for oil or gas production, and a measure creating new restrictions for commodity traders whose speculation has driven up the price of oil.

But nothing has gone according to plan.

The price-gouging bill failed to garner the two-thirds support necessary to pass. An accounting issue forced leaders to put off for a day the so-called “use it or lose it” measure. And the legislation to curb speculation is now caught up in a member fight over the proper path forward — a fight that exposes the misgivings some Democrats have about this activist agenda.

So instead of a barrage of legislation aimed at knocking back the Republicans’ gas price assault, Democrats will settle for a measure giving local transit agencies $850 million in each of the next two years to reduce prices and add routes, as well as a symbolic vote calling on President Bush to crack down on “excessive” commodity speculation.

The Democrats’ stumbles come as congressional Republicans continue to push aggressively for more domestic oil and gas production on the Outer Continental Shelf and in Alaska’s Arctic National Wildlife Refuge as well as for an ambitious plan to turn coal shale beneath the High Plains into natural gas.

Republicans claim an amendment — offered by Pennsylvania Rep. John E. Peterson — to open offshore drilling sites 50 miles off the coast has enough support to survive a committee vote on the Appropriations panel.

The committee postponed consideration of the measure on which Peterson planned to offer his amendment, but Chairman Dave Obey (D-Wis.) told members Tuesday he plans to bring it up when lawmakers return from the weeklong Fourth of July recess.

As the Democrats struggle to hold together support for the existing offshore drilling ban, they find themselves coming apart on another energy issue: what to do about oil speculators.

Some Democrats, such as Agriculture Committee Chairman Colin Peterson of Minnesota and Rep. Bob Etheridge of North Carolina, would like party leaders to advance a modest measure that gives federal regulators more resources to crack down on “excessive” speculation in the United States and abroad.

“I’m not, at this point, sold that speculation is the reason these prices are going up,” Peterson said.

Others, such as Connecticut Rep. Rosa DeLauro and Maryland Rep. Chris Van Hollen, the Democratic Party’s campaign chief, have urged the speaker to go further by making substantive changes to the current laws, members and aides said.

Add to that a jurisdictional squabble between Peterson’s Agriculture Committee and members of the House Energy and Commerce Committee — including Michigan Democratic Rep. Bart Stupak — who have been working on this issue for years, and Pelosi faces a major internal challenge in bringing this legislation to the floor.

The speaker met with these and other members for more than an hour Wednesday morning. They were joined by Michael Greenberger, a law school professor at the University of Maryland and a former director of trading and markets at the Commodity Futures Trading Commission, who has testified before Congress that speculators are driving up the price of oil.

But the participants who emerged from that meeting suggested the various committees of jurisdiction will begin looking at this legislation before leaders craft a compromise.

“I think the consensus is that this needs to be done very carefully,” said House Majority Leader Steny H. Hoyer (D-Md).

“We’re going to focus on the actual legislation and try to come to a consensus,” Peterson said.

Pelosi told reporters Wednesday that she expects legislation on the floor sometime next month, before lawmakers leave for the summer and for their respective nominating conventions.

Some Democrats wanted to vote on a modest bill this week to give themselves cover before the recess, aides said.

A number of conservative Blue Dog Democrats were also grumbling that party leaders were planning to put them in a bad spot politically with these aggressive oversight measures, aides said. Pelosi met with a number of these members Wednesday, but the speculation issue was only one of the topics discussed.

In the meantime, both parties continued their finger-pointing over the gas prices and the policies that might have an effect on them.

On Wednesday, the Department of the Interior questioned Democratic claims that energy producers could pump oil or gas on 68 million acres of land that has already been leased. This talking point became a common refrain last week; Democrats argued that the lease-holding oil companies could produce 4.8 million barrels of oil and more than 44 million barrels of natural gas each day under the current contracts.

“The views contained in the report [issued by Democrats on the House Natural Resources Committee] are based on a misunderstanding of the very lengthy regulatory process,” wrote C. Stephen Allred, the assistant secretary of the Interior for Land and Minerals Management, who favors increased oil and gas exploration. “The existence of a lease does not guarantee the discovery of, or any particular quantity of, oil and gas.”

In his letter — which came at the request of Republican Rep. Don Young of Alaska — Allred further argued that a lengthy permitting process creates a lag for energy producers to extract fossil fuels from this land.

In a statement issued in response to the letter, House Natural Resources Committee Chairman Nick J. Rahall (D-W.Va.) called it “a diversion from the simple fact that there are 68 million acres of leased land not producing any oil and gas.”

Rahall said that the administration’s argument about the slow permitting process undercuts its arguments for lifting the offshore drilling ban; a long permitting process, he said, would slow any benefit to be gained from offshore drilling, too.

“Roughly 80 percent of the oil and gas under federal waters are in areas already open for leasing. They should focus on that before trying to grab any more of our public lands,” Rahall said.

The fight over gas prices also has a personal component.

Pelosi has staked her speakership, in part, on aggressive environmentalism to limit human contributions to global warming. This puts her at odds with those in her caucus who are more sympathetic to the oil and gas industry. That dynamic forces her to tread lightly inside the party, but it does not prevent her from issuing lofty challenges in the name of the environment.

“We are in the battle of this generation,” Pelosi told reporters Wednesday. “We’re ready to make the fight. We are united behind it.”