House of Representatives Passes Bills To Speed Up Oil Drilling

The U.S. House of Representatives, which is conrolled by Republicans, has voted to impose deadlines on the Obama administration to issue offshore drilling permits, as Republicans renewed calls for greater amounts of domestic oil production amid rising gasoline prices. The House passed the legislation last Wednesday, approving the second of three bills that seek to expand and speed up the pace of offshore oil and gas drilling.  The bill cleared the House by a vote of 263 to 163, with votes falling mostly along partly lines.

The bill, introduced by House Natural Resources Chairman Doc Hastings (R., Wash.), follows months of complaints by oil and gas companies, particularly those operating in the Gulf of Mexico, about the length of time it takes for the Interior Department to review and issue drilling permits in the wake of last year’s Deepwater Horizon oil spill. These companies have accused the department of imposing a de facto moratorium on drilling after lifting an actual moratorium on deep-water drilling in October 2010.

Shortly after the bill’s passage, House Democrats unveiled a new energy plan aimed at repealing billions of dollars of tax breaks for the largest oil and gas companies and imposing fines on companies that don’t produce on existing leases, among several other measures.

The Senate, which is controlled by Democrats, is unlikely to approve the measure Republican bill(s). The Senate, like House Democrats, is instead looking to repeal tax breaks given to the largest oil and gas companies. One such proposal, announced Monday by Sen. Robert Menendez (D., N.J.) and other lawmakers strips away about $2 billion in annual tax incentives given to the industry and uses the revenue to pay down the U.S. deficit.

The House bill requires the Interior Department to issue or deny a permit application within 30 days of receiving it, although it allows the department an additional 30 days if necessary.

Under current law, the Interior Department isn’t obligated to issue or deny permits in any particular time frame.

The House bill is part of a package of legislation introduced by Republicans that seeks to expand or speed up offshore drilling. Earlier this month, the House approved the first of those bills, aimed at forcing the Obama administration to hold lease sales planned for the Gulf of Mexico and off the Virginia coast.

A third bill, which the House is expected to consider on Thursday, requires the administration’s leasing plan to include areas with the greatest known oil and gas reserves. It also directs the Interior Secretary to establish a production goal when developing those five-year leasing plans.

The Democrats’ proposal includes three measures, introduced by Reps. Timothy Bishop (D., N.Y.), Gerald Connolly (D., Va.) and David Cicilline (D., R.I.). The bills end $31 billion of tax breaks for large oil and gas companies over 10 years, impose fees on companies that hold leases but are not yet producing on them, and implement the recommendations outlined by the commission investigating the Deepwater Horizon oil spill, among other things.  (GCaptain, 5/14/2011)