On July 30, 2010, the U.S. House of Representatives passed two oil spill bills before adjourning for its summer recess: the Consolidated Land, Energy and Aquatic Recourses Act of 2010 (H.R. 3534 or the “CLEAR Act”) and the Offshore Oil and Gas Worker Whistleblower Protection Act of 2010 (H.R. 5851).  The CLEAR Act would eliminate OPA’s $75 million liability cap on economic damages, lift the moratorium on offshore drilling for companies that comply with certain safety standards, create new Department of Interior agencies, and impose an annual conservation fee of $2 per barrel on oil produced from federal leases.  H.R. 5851 seeks to add protections for offshore workers who report safety violations.  

Senate Democrats may consider their companion bill, the Clean Energy Jobs and Oil Company Accountability Act of 2010 (S. 3663), in September when the Senate reconvenes after its August recess.

Senator Mary Landrieu (D-LA) sent a letter to William Reilly, co-chair of the commission investigating the Gulf of Mexico oil spill, asking the commission not to leave the six-month moratorium on deepwater E&P activities in place while it finishes its investigation.

Speaking before a Senate subcommittee yesterday, Michael R. Bromwich,  the recently-appointed director of the renamed Bureau of Ocean Energy Management, Regulation and Enforcement, said that his goal was to “break up the cozy relationship between some agency workers and the oil and gas industry,” promising “zero tolerance”  for “corruption and coziness.” Congressional Quarterly [subscription required] provides additional coverage.

Separately, Sens. Jeff Bingaman (D-NM) and Lisa Murkoski (R-AK) introduced S. 3516, the Outer Continental Shelf Reform Act, that would give Secretary of the Interior Ken Salazar new authority to overhaul offshore E&P regulations. A hearing has been scheduled for the Senate Energy Committee to consider the bill.

Louisiana Governor Bobby Jindal, in a letter dated June 2, urged President Obama and Interior Secretary Ken Salazar to overturn the moratorium on deepwater drilling activities in the Gulf of Mexico.  Gov. Jindal argues that the six-month deepwater moratorium, which applies to 33 permitted exploratory wells in the Gulf, will eliminate an estimated 3,000-6,000 Louisiana jobs in the next few weeks, and potentially over 10,000 within a few months.  Gov. Jindal asks that "the federal government move quickly to ensure that all deepwater drilling is in proper compliance with federal regulation and is conducted safely so that ... thousands of jobs ... are not in limbo."  
 
Senator David Vitter (R-LA) sent a similar letter to President Obama the following day, arguing that the moratorium should be replaced by more aggressive rig inspections.

Sen. Mary Landrieu (D-LA) is urging the Obama administration to end the shallow-water component of the recently issued moratorium on oil drilling in the Gulf of Mexico.  Sen. Landrieu argues that "[t]he inspections and regulations [for shallow-water drilling] need to be different than [for] deep water."  She also introduced a new bill (the RESPOND Act) that would begin revenue sharing with energy-producing Gulf states immediately.  Such revenue sharing, which redirects offshore drilling royalties from the federal treasury to state coffers, has been a hot topic in recent months.  For more information, see yesterday's E&E GreenWire [subscription required].

Noting that “America’s need for domestic energy has not changed and OCS development remains a vital part of our overall national energy picture,” National Ocean Industries Association Chairman Burt Adams urged members of Congress to proceed with caution regarding any legislation on offshore exploration and production activity.

On May 13, 2010, Senators David Vitter (R-LA) and Jeff Sessions (R-AL) introduced the Oil Spill Response and Assistance Act (S.3375), which seeks to increase the liability cap for economic damages under the federal Oil Pollution Act.  Under this bill, such liability would be capped at either $150 million (double the current cap) or an amount equal to a responsible party's profits over the last four quarters, whichever is greater.  "Under our bill," announced Sen. Vitter, "the bigger companies would be liable for more than the $10 billion cap others propose.”  Senate Democrats attempted a unanimous voice vote to pass their proposal to raise the cap to $10 billion on Thursday, but Sen. Lisa Murkowski (R-AK) objected.

Politico reports that legislative language that would expand oil and gas exploration into the eastern Gulf of Mexico has been removed from the American Power Act, an energy and climate bill released today by Sens. John Kerry (D-MA) and Joe Lieberman (I-CT).  The Washington Post also reports that the bill includes a provision that would permit a state to “opt out” of drilling projects that are located within 75 miles of the state’s shores.

Following his letter to President Obama, Senator Bill Nelson (D-FL) introduced two bills in response to the Gulf of Mexico offshore rig spill incident.  The first bill, S. 3308, seeks to halt the Department of the Interior’s five-year plan to expand offshore drilling.  A companion bill has been introduced in the House by Representative Kendrick B. Meek (D-FL), who also is running for U.S. Senate.  Senator Nelson’s second bill, S. 3305, seeks to retroactively amend the Oil Pollution Act of 1990 to increase the liability limit for economic damages from spills from offshore facilities from $75 million to $10 billion.  Representative Rush Holt (D-NJ) introduced a similar bill in the House.

Senator Bill Nelson (D-FL) has sent a letter to President Obama asking for a moratorium on test wells and exploratory operations in coastal waters pending an investigation into the Gulf of Mexico offshore rig spill incident.  "Until we learn what happened," Nelson wrote, "I'm asking that you also call for an immediate halt to test-wells and all other exploratory operations in coastal waters."  Senator Nelson also plans to introduce legislation to prevent the Department of the Interior from promoting offshore drilling.

Senator Nelson's office has published a copy of the letter to the President .

On April 20, 2010, Senator Landrieu (D-LA) spoke out in favor of coastal states receiving royalties for offshore drilling activities in federal waters off their shores. Earlier this week, Senators Bingaman (D-NM), Dorgan (D-ND), and Rockefeller (D-WV) sent a letter to their colleagues voicing their strong opposition to such revenue sharing. In her statement, Senator Landrieu explained, "if there's no drilling, the interior states get no money," adding that, "there is not going to be any drilling unless there is revenue sharing." See yesterday's story in EnergyWashington [subscription required] for more information.

On April 19, Senator Sherrod Brown (D-OH) introduced S.3226, a bill co-sponsored by Sens. Carper (D-DE), Collins (R-ME), Snowe (R-ME), and Kaufman (D-DE).  The bill is aimed at stimulating a domestic offshore wind power industry and would require the Department of Energy to develop a roadmap to assist and coordinate offshore wind power implementation efforts.  In addition, the bill calls for the appropriation of $75,000,000 for each of fiscal years 2011 through 2015 to establish an Offshore Wind Power Research and Development Program that would assist in the implementation of the roadmap.

Today, Senators Bingaman (D-NM), Dorgan (D-ND), and Rockefeller (D-WV) expressed their opinion that redirecting revenues from energy development on the Outer Continental Shelf from the U.S. Treasury to coastal states should not be allowed.  In a letter to their colleagues, the Senators noted their strong opposition and reminded their fellow Senators that state revenue sharing amendments were defeated twice in 2009.  They further argue that coastal states already receive significant revenues from offshore drilling activities, the revenues from which they estimate will total about $6 billion in 2010.  See today's story in Greenwire [subscription required] for more information.

Last week Gov. Bob McDonnell (R-VA) notified the Governors' Wind Energy Coalition that he was terminating Virginia’s further participation in the coalition.  According to the letter of termination (available via The Hill), Gov. McDonnell ended Virginia’s participation in the group because of a letter sent to the U.S. congressional leadership advocating a national renewable energy standard (RES).  Governor McDonnell claims that the letter included his name and implied that his administration supports a national RES policy, but he does not agree with the policy and did not approve the letter before it was released.  The letter also notes that Virginia will continue to participate in the Atlantic Offshore Wind Energy Consortium.

Challenging politicians in Washington and the American people to "move beyond the tired debates of the left and right, the business leaders and the environmentalists," President Obama announced this morning that his administration is proposing to make more than 167 million acres of OCS lands off the Atlantic and Gulf coasts and in the Arctic available for oil and natural gas leases. This proposal begins the process for oil and natural gas E&P leases on the East Coast, from Delaware to the central coast of Florida, a feat which Republicans were unable to accomplish during the 8 years of the Bush Administration. Offshore areas from New Jersey to Maine would remain off-limits. According to the New York Times, the Administration hopes the offshore leasing plan will reduce dependence on oil imports, generate revenue from the sale and production of offshore leases, and boost support in Congress for comprehensive energy and climate legislation.  As the President noted in his remarks today, "This announcement is part of a broader strategy that will move us from an economy that runs on fossil fuels and foreign oil to one that relies on homegrown fuels and clean energy. ... Failure to recognize this reality would be a mistake."
 
In response to this morning's announcement, Sen. Ben Cardin (D-MD), noting the environmental risks associated with offshore E&P activities, told CNN that "there are areas that are acceptable for drilling, but I think this is too high of a risk for Maryland." Senator Cardin was one of the senators who signed a letter to Senate colleagues expressing concern over the effects of increased offshore energy activities on coastal tourism and fishing economies.
 
Reacting to the President's announcement, Randall Luthi, president of the National Ocean Industries Association (NOIA) called the Obama Administration's plan, "a good start to secure reliable and increased access to areas of the OCS where vital energy resources may lie."  Luthi went on to note that NOIA is "delighted that the Administration agrees with the State leadership in Virginia that the lease sale off that coast should go forward under the current plan."

Eighty-Eight House Republicans last week sent a letter to Interior Secretary Ken Salazar, voicing displeasure with the Secretary's recent decision to discard the 2010-2015 OCS lease plan and instead implement the next Five-Year Plan starting in 2012.  The House Republicans are characterizing this two year delay in issuing a new plan the "Obama Moratorium," and assert that it directly conflicts with American public opinion, which favors offshore drilling.  
 
Meanwhile, a number of Senate Democrats from coastal and Great Lakes states earlier this week delivered a letter to Sens. John Kerry (D-MA), Lindsay Graham (R-SC) and Joe Lieberman (I-CT), arguing that pending climate change legislation should not be accompanied by measures that would grant "unfettered access" of the OCS to oil and gas interests.  Citing environmental concerns over oil spills and  potential turf conflicts between E&P operations and the Department of Defense's training zones, the letter goes on to argue against a proposal that revenues from the new OCS leases be shared with the impacted coastal states, and that any opening up of the OCS for drilling should be accompanied by a reform of the leasing process.

Senators John Kerry (D-MA), Lindsey Graham (R-SC) and Joe Lieberman (I-CT) have reportedly drafted a provision in the yet-to-be-released climate and energy bill that proposes giving a share of the revenues from offshore oil and gas production to coastal states that agree to allow these activities in their waters. If the bill is passed, coastal states would receive one quarter of the revenue; ten percent would go to the Land and Water Conservation Fund; and the federal government would allocate the remaining 65 percent to deficit reduction. See E&E Daily [subscription required] for more details.

Several Senators voiced concerns about the amount of time it may take to secure regulatory approval for offshore energy development at a Senate Appropriations Subcommittee hearing on the FY2011 budget request for the Department of the Interior on March 9.  Senator Collins was among them, expressing particular concern that MMS may require several environmental impact statements to obtain a lease on federal offshore lands.  Secretary of the Interior Ken Salazar tried to allay fears and explained that a group within the Department of the Interior has been assigned the task of developing a streamlined permitting process.  Salazar added that  "it's absolutely unacceptable that any government process like this should take three to nine years."  A webcast of the hearing is available here.

Sen. Lisa Murkowski (R-AK), ranking member of the Energy and Natural Resources Committee, has prepared a discussion draft of a bill that would extend drilling in the eastern Gulf of Mexico, authorize drilling in the Arctic National Wildlife Refuge, establish royalty revenue sharing with coastal states that permit offshore drilling, and streamline offshore environmental review and permitting procedures.  Sen. Murkowski believes that the expansion of domestic drilling should accompany any new climate legislation Congress considers.

Sen. Tom Carper (D-DE), along with Sens. Olympia Snowe (R-ME), Sherrod Brown (D-OH), and Susan Collins (R-ME), introduced a bill yesterday to provide financial incentives for the investment, development and production of offshore wind.  Among other things, the Carper-Snowe-Brown-Collins offshore wind bill would extend the production tax credit (PTC) for offshore wind farms until 2020.  The sponsoring Senators are also working on additional legislation to support and expand offshore wind initiatives. 
 
In other wind power related news on Capitol Hill, Sen. Chuck Schumer (D-NY) and others introduced a bill which would require all projects funded by stimulus package dollars to rely solely on American-built products.  The Senators also sent a letter to Treasury Secretary Tim Geithner pushing for a moratorium on all stimulus payouts for clean energy projects until Congress considers the bill.  Under the current stimulus law, the "Buy American" provision - which requires that a project rely primarily on American-built products - applies only to "public works."  The Schumer bill would extend the Buy American requirement to all renewable energy projects, including every wind farm that is being or proposed to be built with stimulus assistance.  Denise Bode, the CEO of the American Wind Energy Association (AWEA) issued a sharply-worded response to the bill, arguing that it would "torpedo one of the most successful job creation efforts" of the stimulus, in part because American manufacturers do not yet have the capacity to produce 100% of the required wind turbine components. 

Today, Matt Rogers, a senior advisor to Energy Secretary Steven Chu, testified before the Senate Energy and Natural Resources Committee and strongly challenged Senator Schumer's characterization of DOE's use of stimulus dollars. He expressed the view that the senators' proposed legislation would actually eliminate American jobs.  He challenged the study underlying the proposed legislation as "misleading" and "factually false" because it only focused on the overseas headquarters of companies and failed to specifically account for actual job creation in the United States.

During testimony before the Senate Energy and Natural Resources Committee, Interior Secretary Ken Salazar said that he hopes to release the revised 2007-2012 5-Year OCS Plan, as ordered by the D.C. Circuit Court of Appeals, later this month, as well as the next 5-Year Plan, which would run from 2012-1017. 
 
The Houston Chronicle provides further coverage.

A report released this week by Securing America’s Future Energy concludes that opening the eastern Gulf of Mexico to oil and gas exploration and production would not affect U.S. military operations in the area.  Senator Byron Dorgan (D-ND) touted the report to Oil & Gas Journal, saying that its conclusions support his legislation that would open the eastern Gulf of Mexico to oil and gas E&P.  Responding to the report, Sen. Bill Nelson released a statement opposing expanding E&P activities in the eastern Gulf, noting that the Pentagon has said that E&P is incompatible with military training operations in the area.

Platts Inside Energy Extra [subscription required] reports that the congressional delegation from Massachusetts has requested that MMS place its new regional office for renewable energy along the Atlantic seaboard in Massachusetts.  Secretary of the Interior Ken Salazar announced the creation of this office earlier this month, but a site for the office has not yet been selected.

Senators Mark Begich (D-AK) and Olympia Snowe (R-ME) introduced a bill yesterday to establish a comprehensive ocean, coastal, Great Lakes, and atmospheric research, prediction, and environmental information program within NOAA to support renewable energy.  The bill, titled the Renewable Energy Environmental Research Act of 2009, would require the Administrator of NOAA to develop a renewable energy research plan that would include a coordinated weather, water, and climate prediction component focused on renewable energy, such as offshore wind and tidal energy, to provide information and decision services to support the development of these energy sources.  The proposed Act also focuses on avoidance, minimization, and mitigation strategies to address potential impacts of offshore renewable energy projects on the marine and coastal environment.

On December 8, 2009, a Senate Energy and Natural Resources subcommittee considered H.R. 3165, a bill that would provide $200 million over five years to the Department of Energy's wind energy research program.  The proposed goals of the research program are to improve the energy efficiency, reliability, and capacity of wind turbines; optimize the design and adaptability of wind energy systems; and reduce the cost of construction, generation, and maintenance of wind energy systems.  One of the stated focuses of the program is the development of wind technology for offshore applications.

The Senate Committee on Energy and Natural Resources held a hearing on the environmental impacts of offshore energy” on Nov. 19.  Representatives from MMS, industry, and experts on ocean resource conservation testified.  The hearing was held at the request of Sen. Byron Dorgan (D-ND), who stated that he plans to offer amendments to Senate energy and climate change legislation to help expand offshore oil and natural gas production.  Sens. Lisa Murkowski (R-AK) and Mary Landrieu (D-LA) said they plan to offer an amendment that would permit costal states that allow offshore drilling in federal waters to receive 37.5% of royalties.

Early this week, Sen. David Vitter (R - LA) introduced an amendment (free registration) to the DOI appropriations bill for FY2010 that would prohibit the use of funds to delay the five-year OCS Oil and Gas Leasing Program.  A vote is expected this week.

Today, FERC Chairman Jon Wellinghoff testified before the Senate Committee on Environment and Public Works (EPW) to address climate change legislation as it pertains to the energy sector.  Chairman Wellinghoff used the opportunity to express FERC's support for the development of hydrokinetic energy technologies.  As evidence, the Chairman referenced FERC's policy of allowing some hydrokinetic technologies to be tested without a license and others to receive expedited licenses under a "pilot license" process.  In addition, the Chairman pointed to FERC's Memorandum of Understanding with MMS clarifying jurisdiction over hydrokinetic projects on the OCS, as well as independent agreements on project development with Washington and Oregon states, as measures FERC has adopted to advance hydrokinetic projects.

Yesterday, freshman Alaska Senator Mark Begich (D) called for ratification of the Law of the Sea Treaty and introduced a package of seven bills addressing a variety of Arctic policy issues.  The energy and shipping related measures in the package include:
 
Arctic OCS Revenue Sharing Act (S. 1560) - gives Alaska natives the same 37.5% share of royalties from offshore oil and gas production in federal waters that Gulf of Mexico states currently receive.  This is similar to the measure introduced by senior Alaska Sen. Lisa Murkowski (R) last week.
Arctic Climate Change Adaptation Act (S. 1566) - provides funding for Alaskans to adapt to the impacts of climate change, including clean energy development.
Arctic Ambassador Act (S. 1563) - creates a new U.S. Ambassador to the Arctic Council.
Arctic Marine Shipping Assessment Implementation Act (S. 1564) - provides funding to replace the U.S. icebreaker fleet and build new forward operating Coast Guard air bases, as well as other measures to ensure safe and reliable maritime transportation in the Arctic region.
Arctic Oil Spill Research and Recovery Act (S. 1561) - calls for more research to improve oil spill prevention and response in the Arctic.
Arctic Science, Coordination and Integration Act (S. 1562) - requires a new study to create a comprehensive strategy to coordinate Arctic research and make recommendations to Congress. 
 
The bills are available through Thomas.  You can view Sen. Begich's press release here.

Sen. Murkowski (R-AK), the ranking member of the Senate Energy and Natural Resources Committee, released a statement yesterday urging the Interior Department to complete its environmental analysis of the 5-year offshore leasing program (2007-2012) as quickly as possible. The D.C. Circuit ordered this analysis in April when it vacated and remanded the plan, and this week clarified that its order applied only to leases off Alaska.

In a press release issued yesterday, Senator Lisa Murkowski (R-AK) announced the introduction of the Domestic Energy Security Act (S. 1517), which would authorize revenue sharing for any coastal state that allows new oil and gas exploration. Specifically, the legislation would grant coastal states a 37.5% share in revenues generated from oil and natural gas production in federal waters off their shores. In announcing her support as a co-sponsor of the legislation, Senator Mary Landrieu (D-LA) stated, “As our nation weans itself off foreign oil and transitions to the next generation of energy, we need OCS production in U.S. waters to get us there. Coastal states will play a key role in building that ‘energy bridge’ if Congress can guarantee them their fair share of revenue and conservation royalties."
 
The bill also would permit leasing in the eastern Gulf of Mexico to within 45 miles of Florida's coast and in the Destin Dome area, which reaches to within 10 miles of the Florida coast near the panhandle.  
 
In response, Sen. Bill Nelson (D-Fla.) denounced the new bill, calling it an oil industry bailout. Nelson said, "it's Alaska and Louisiana's senators' plan to boost their own revenues in tough economic times. But even in the toughest of times, there are some things states shouldn't sell out, like Florida's economy and environment.''

On July 8, 2009, the Senate Commerce, Science, and Transportation Committee approved  the Maritime Administration Authorization Act of 2010, which among other things, would create a grant program for "America's Marine Highways" as an extension of the surface transportation system. The provision, authored by Sen. Frank Lautenberg (D-NJ), would encourage more freight to be carried by barges and ships by sea and by inland waterway in an effort to reduce roadway congestion. The bill would also establish a Port Infrastructure Development Program for local jurisdictions and port facilities to improve the capabilities of their port facilities. Senator Lautenberg's press release can be found here. Additional commentary can be found in the New Jersey Politicker blog.  

In a close vote today, the Senate Committee on Energy and Natural Resources added an amendment to the proposed energy bill that would repeal mandatory royalty relief for oil and gas leases in deep waters off the coasts of the U.S. The  amendment gives the Secretary of the Interior discretion to grant or deny royalty relief  below certain price thresholds. As has been the case throughout  much of the debate on offshore oil and gas drilling, Democrats argued that incentives for oil and gas companies are unnecessary, while Republicans contended that the U.S. needs to increase domestic supplies to end dependence on foreign oil. See yesterday's New York Times for more details.

Today the Senate Energy and Natural Resources Committee approved Senator Byron Dorgan's (D-ND) amendment to the broad energy bill the Committee is currently marking up.  Dorgan's amendment proposes opening oil and gas leasing in the eastern Gulf of Mexico up to 45 miles from Florida's coast. The passage of Dorgan's proposal would end a drilling ban across most of the eastern Gulf waters, including in an area known as the Destin Dome which reaches within 10 miles of the Florida coast, and is believed to hold as much as 1 trillion cubic feet of natural gas. Senator Bill Nelson (D-FL) and others voiced strong opposition to the plan, arguing that it would interfere with military training. Further, Senator Nelson threatened to filibuster if necessary to block the effort. 

Separately, the Committee rejected Senator Mary Landrieu's (D-LA) revenue sharing proposal, which would have distributed 37.5% of the revenues collected from oil and gas development in the eastern Gulf to nearby states, directed 50% of the revenues toward federal deficit reduction, and 12.5% to the Land and Water Conservation Fund. In particular, Landrieu's plan would have extended a 2006 Gulf leasing law that established a revenue sharing program for several Gulf Coast states to Alaska and other states that may have offshore leasing in the future. Find further information in E&E's Greenwire. [Subscription required]

In a June 3 hearing the Senate Appropriations Subcommittee on Interior, Environment, and Related Agencies urged DOI Secretary Ken Salazar to consider the potential negative environmental impacts of renewable projects on surrounding habitats both on- and offshore. Subcommittee Chairman Sen. Dianne Feinstein (D-CA) stated the infrastructure required for renewable projects could make a "huge mark" on areas designated for conservation. Sen. Feinstein asked the Secretary to mitigate those consequences through the DOI permitting process. Ranking Committee Republican Sen. Lamar Alexander (R-TN) suggested that renewable energy developers be required to post bonds that could later be used to remove equipment and restore the natural habitat to its original condition once the projects are no longer viable. Sec. Salazar was receptive to the bond idea, and agreed "what we need to do is make sure that as we are permitting renewable energy projects we are doing it cradle to grave." A webcast of the hearing can be viewed here. 

Offshore Energy Law Blog notes that MMS' Final Rule for renewable energy projects on the OCS includes a bonding and decommissioning requirement for such facilities.

Senate Energy and Natural Resource Committee Chairman Jeff Bingaman issued a press release yesterday discussing his continuing intent to pursue a comprehensive energy bill.  In the press release, Bingaman reaffirmed his support for developing traditional sources of energy, including offshore oil and gas.

Yesterday, the Kingdom of Norway submitted a proposal to the U.N. Commission on the Limits of the Continental Shelf defining Norway's sovereign territory beyond its continental shelf, becoming the first nation to officially set subsea Arctic boundaries.  Under the Law of the Sea Treaty, which Norway is a party to, nations can claim subsea territory up to 200 nautical miles beyond the end of their continental shelves, giving them the rights to subsea minerals.  This includes oil and gas, which the Arctic is believed to hold in significant amounts, and which is becoming more and more accessible as rising temperatures cause Arctic ice sheets to recede later and later into the year.   
 
Norway is the largest offshore producer of oil in the world and the third largest exporter of crude.  The other nations with potential subsea Arctic territory claims are the U.S., Canada, Russia, and Denmark.  The United States is not a signatory to the Law of the Sea Treaty, which has been blocked by conservative Senators who believe ratifying the treaty will result in a concession of U.S. sovereignty to international governing bodies.  However, Secretary of State Hillary Clinton has stressed the need to sign on to the treaty, including in her Senate confirmation hearings, where she stated that the failure to sign has left the U.S. "disadvantaged" in the Arctic.

On Thursday April 2, 2009, the U.S. Senate rejected an amendment sponsored by Senator Mary Landrieu (D-LA) to the annual budget blueprint (S. Con. Res. 13) that would have given states half of the revenues from offshore oil and gas leases, by a vote of 37-60.  Currently, coastal states receive approximately 37.5% of the revenues.  Included in the amendment was a provision for revenue sharing for leases in newly opened parts of the Outer Continental Shelf where adjacent states currently have no entitlement to revenues. 
 
After Landrieu's amendment was rejected, the Senate approved by unanimous consent an amendment offered by Senator Kay Bailey Hutchison (R-TX).  The Hutchison amendment adds language to the budget bill encouraging expanded offshore oil and gas production as a means to reduce U.S. dependence on foreign energy imports.

On March 9, 2009, Senate Energy and Natural Resources Committee Chair Jeff Bingaman released a draft electric transmission bill.  This comes almost one week after Senate Majority Leader Harry Reid released his version of a bill with similar objectives -- to improve and augment the nation's electric transmission infrastructure in order to bring renewable power to consuming markets.  Like Reid's draft legislation, Bingaman's bill as written includes renewable power generated from offshore energy facilities.  

The Bingaman bill contains significant provisions favoring federal authority over siting of transmission infrastructure and applies to "high-priority national transmission project[s]."  Included among the qualifying energy sources identified in the legislation is energy generated from ocean energy, which expressly includes tidal, wave, current, and thermal.  Any entity that seeks to operate, construct, acquire, or modify a high-priority national transmission project would be required to submit an application to FERC (assuming the proponent does not already have an existing certificate).  Click here to read the draft bill.

The Senate Energy and Natural Resources Committee is slated to hold a hearing on electric transmission on Thursday, March 12, 2009.

In an interview with the Associated Press on Monday,  Interior Secretary Ken Salazar called for the creation of "renewable energy zones" to promote the development of offshore wind projects, among other renewable initiatives.  He argued that the waters off the Atlantic coast hold some of the country's greatest wind energy potential and, although the "rules to move forward" with offshore energy are not in place, he promised to move aggressively to develop such offshore resources.   Commenting on opposition to offshore energy siting, Salazar stated that it is critical that "we get this thing done and not get stuck in a not-in-my-backyard syndrome."  He signaled his support for the Cape Wind Project off the coast of Cape Cod, MA, and expressed his desire to review concerns raised by Gov. Tim Kaine regarding oil and gas production offshore Virginia.

Salazar's comments appear to echo Senator Harry Reid's (D-NV) recently introduced renewable energy transmission legislation, which direct the President to designate "renewable energy zones."  Under the proposed definitional language, renewable energy would include wind power projects and ocean-based hydrokinetic power projects.

Senator Mary Landrieu (D-LA) told Environment & Energy Daily [subscription required] that she plans to work with senators from other energy-producing states to address "excessive" increases in taxes and other costs associated with oil and gas production, including production on the OCS in the Gulf of Mexico, in the Obama Administration's proposed budget. Sen. Landrieu noted that raising costs of production could limit development of domestic energy supplies; however, her stance on these provisions places her at odds with Rep. Nick Rahall (D-WV), Chairman of the House Natural Resources Committee, who already endorsed this part of the budget.

Senate Energy and Natural Resource Committee Chairman Jeff Bingaman announced today that he proposes amending the tax code to give renewable producers the option of a 30 percent cash grant in lieu of 30 percent production credit. A related amendment was included in the approved House bill and the current Senate version; however, Bingaman's proposal would be a further incentive/boon to renewable producers than that first amendment. His proposal (and the current tax incentive) apply to a wide range of renewable facilities, and appear at this time to include certain offshore facilities (e.g., offshore wind facilities).

Sen. Lisa Murkowski (R-AK), Ranking Member of the Senate Energy and Natural Resources Committee, suggested that the Committee is not likely to address the recently lifted OCS moratorium in energy legislation expected to be crafted over the next several months. She does, however, expect such legislation to allow for an assessment of current OCS reserves. These and other OCS issues are sure to be the subject of significant debate as the Senate moves forward on energy legislation. Stay tuned. Read more at E&E Daily for more [subscription required].

Senator Bingaman issued a short statement today applauding Interior's analysis of the environmental and safety impacts of the Cape Wind Energy Project proposed for offshore Massachusetts.  He also expressed support for a team-oriented approach to offshore drilling, including collaboration from DOI and the coastal states.  With the Obama Administration and Secretary Salazar supporting a "thoughtful approach" toward offshore drilling, it seems increasingly unlikely that a comprehensive offshore moratorium on the east and west coasts will be resurrected by Congress.