Royalty-sharing bill may be priority; Senate Demo leader says measure needed

BYLINE: By Bruce Alpert, and Jan Moller, Staff writers

Senate Democratic Leader Harry Reid said Wednesday that he hopes a post-election session of Congress will take up an energy bill that would provide money from royalty revenue-sharing to Louisiana and other producing states.

"That's important for the American people," Reid said. He listed the bill as one of five measures, including legislation to provide safeguards against bioterrorism and a pandemic flu, that he hopes can be adopted during the lame-duck session that begins Tuesday.

The comments by Reid, who will become majority leader after Democrat Jim Webb apparently held on to his narrow lead in the Virginia Senate race, were seen as a positive sign by Louisiana lawmakers, eager after years of trying to get a guaranteed steady flow of revenue from royalty revenue-sharing for coastal restoration and hurricane protection projects.

But there's continued opposition in the Senate to a House-passed bill that would open more territory to drilling than a Senate version, and provide substantially more money to the states, especially early on.

Sen. Mary Landrieu, D-La., said the best way, and perhaps the only option for getting the bill passed this year, would be for the House to adopt the Senate-passed legislation. If it did so, the bill would go directly to President Bush, who has already said he would sign it into law.

Bill 'too extreme'

Landrieu said the Senate bill is seen as "too extreme" by many senators of both political parties.

In the past, Rep. Richard Pombo, R-Calif., chairman of the House Resources Committee, has held out for major provisions in the House package, including one that would allow states to opt out of current moratoria against drilling off their shores.

But he was ousted in Tuesday's election that swept the Democrats into control of the House and Senate, and it's unclear whether his loss could make the GOP leadership more willing to accept the Senate version.

At a Baton Rouge news conference, U.S. Sen. David Vitter, R-La., and U.S. Rep. Bobby Jindal, R-Kenner, said there's no question that the House bill provides more benefits to Louisiana. But Jindal said the House should approve what is obtainable this year because next year it might not be able to get passage of any meaningful revenue sharing legislation.

Jindal noted that Sen. Jeff Bingaman, D-N.M., who will become Senate Energy Committee chairman, has said he opposes royalty revenue-sharing on philosophical grounds.

Vitter said: "Clearly, neither of us liked the results in the elections last night, but what we're trying to do is leverage those results and use them to motivate the Republican leadership . . . to act this year and to make it a top priority this year."

Hoping for storm projects

He and Jindal said they also hope that Congress could pass a water resources bill with authorization for important hurricane protection projects and the closing of the Mississippi River-Gulf Outlet during the post-election session.

Former Sen. John Breaux, D-La., now a lobbyist, said one problem getting the OCS bill adopted this year is that "Republicans want to go home as quickly as possible" after being defeated in the mid-term elections, and many Democrats would rather start anew when they are in the majority to put together an energy bill more to their liking.

The Senate's narrower OCS legislation would permit drilling for the first time on 8.3 million acres in the eastern Gulf of Mexico and would allow coastal states, including Louisiana, to get 37.5 percent of the royalties oil and gas companies pay to the federal government. For Louisiana, it could mean about $200 million in the first 10 years and more afterward as the revenue-sharing provision would expand to new wells throughout the Gulf of Mexico.

The House, by contrast, would allow all states along the East and West coasts to opt out of two decade-old federal drilling bans. States giving the green light to drilling could get a cut of up to 50 percent of royalties not just from new leases, but on existing ones as well. Jindal has estimated the House bill would steer $9 billion to Louisiana by 2017 and $2 billion annually afterward.

Willing to take Senate bill

But Jindal said he's now willing to accept the Senate bill -- if that's the best Louisiana can get.

"If it turns out it has to be closer to the Senate version to get it done quickly, that's fine," Jindal said. "The important thing is to get legislation done."

Speaking to reporters Wednesday from Taipei, Taiwan, where she is on an economic development mission, Gov. Kathleen Blanco said she hopes that an offshore energy revenue sharing deal can be reached in Congress this year, before the new House and Senate take charge.

Blanco said she did not think the new Democratic leadership would be opposed to the offshore revenue sharing legislation, but that as a practical matter it would be harder to pass next year because supporters of the plan would have to spend a lot of time lobbying and educating the key decision-makers on the issue.

"It's so much work, and you hate to fall back," Blanco said.

Blanco said she spoke about the issue by phone Wednesday with Nancy Pelosi, the California congresswoman expected to be the next speaker of the House. Pelosi has problems with some of the "extraneous issues" in the currently proposed House legislation, "but not our issues," Blanco said. "She's definitely in sync with us."

The contentious issue of offshore drilling for East and West coast states needs to be removed from the proposed legislation, Blanco said.

Blanco said she will go to Washington "as soon as possible" to meet with the new Democratic leadership. Those Democrats have been following the Katrina recovery and have been "with us every step of the way," Blanco said.

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Staff writer Robert Scott contributed to this report.

Bruce Alpert can be reached at bruce.alpert@newhouse.com or (202) 383-7861. Jan Moller can be reached at jmoller@timespicayune.com or (225) 342-5207.