House Panel Favors Expanded Drilling

In the latest sign of the political jitters on Capitol Hill over high gasoline prices, a House panel voted Wednesday to relax a long-standing federal ban on new oil and gas drilling off most of the U.S. coast and to open the Arctic National Wildlife Refuge to energy exploration.

The action by the House Committee on Resources increased the prospects for drilling in the Alaskan refuge, a long-sought Bush administration goal that is bitterly opposed by environmentalists.

The measure will be packaged into an omnibus spending-cut bill before going to the House floor.

In the Senate, the Energy and Natural Resources Committee has approved Arctic drilling. The Budget Committee voted Wednesday to include it in the spending-cut bill, which, by Senate rules, is immune from the filibusters that have blocked the drilling for years.

The House committee also voted to attach to the budget bill another measure long sought by the oil and gas industries -- letting states opt out of the decades-old federal moratorium on new offshore drilling.

But that measure faces a “steep uphill battle” in the Senate, said Eric Ueland, chief of staff to Senate Majority Leader Bill Frist (R-Tenn.), because a bipartisan group of coastal-state senators opposes it on environmental and economic grounds.

The drilling measures are expected to come before the House and the Senate as part of the budget debate as early as next week. Drilling foes hope a dispute over spending cuts will doom the measures.

New offshore drilling is now prohibited -- except in a large part of the Gulf of Mexico and off the Alaska coast -- under a federal moratorium put in place in 1981 and set to expire in 2012.

Under the House measure, states could opt out of the drilling ban in return for a share of drilling royalties, a provision that opponents fear could be difficult for financially strapped states to resist. Virginia has expressed interest in opening its coast to energy exploration. The House proposal also would open to production a section of the eastern Gulf of Mexico that has been coveted by natural gas producers.

Supporters of both measures called them critical to the nation’s economic growth and said they were made more urgent by the energy problems spotlighted by recent Gulf Coast hurricanes.

Backers of Arctic drilling say the area could yield 10 billion barrels of oil. The U.S. consumes about 20 million barrels of oil a day. But opponents say the measure would not provide immediate relief from high gas prices because it would take years to bring the oil to the market. They also contend that it would spoil an environmental treasure they call “America’s Serengeti.”

At a time when oil and gas companies are recording record profits, said Rep. Lois Capps (D-Santa Barbara), the House committee “provided the icing for their cake.... We need to address our energy needs, but we don’t need to jeopardize our environment and economy in a fruitless attempt to drill our way out of the problem.”

Rep. Richard W. Pombo (R-Tracy), chairman of the Resources Committee, said he was confident that the offshore drilling measure would pass the House and expressed hope that Florida Gov. Jeb Bush’s support for the measure would boost its chances in the Senate. Both of Florida’s senators oppose the offshore drilling measure.

The measure’s supporters say it would give states greater protection, such as the power to ban new drilling within 125 miles of the coast beyond the current moratorium’s 2012 expiration.

Rep. Elton Gallegly (R-Simi Valley) said in an interview that the measure would give “the people in California a greater say [rather than] leaving it up to the people in Washington to decide.”

But Rep. Frank Pallone Jr. (D-N.J.), who lost an effort on a 25-15 vote to scuttle the offshore drilling measure, contended it would undermine the ability of states to protect their coastlines from their neighbors’ actions.

“Given the damage that just one oil spill or wrecked rig could do to shore communities that are heavily dependent on clean beach and ocean environments, it seems clear to me that undoing coastal moratoria is simply not worth it,” he said.

Critics attacked GOP leaders for using the budget bill as a ploy to advance energy initiatives. Supporters of Arctic drilling have projected that the leasing would generate $2.5 billion in revenue over the next five years.

Because revenue is considered “negative spending,” that $2.5 billion accounts for a substantial share of the savings in a massive bill that would cut $39 billion, mostly from benefit programs, over the next five years. The total exceeded the $35 billion in spending cuts that Congress ordered in the budget it passed last spring.

In the House, Republican leaders remained unable to round up enough votes to pass a new budget that called for $50 billion in spending cuts.

The budget approved last spring also ordered House and Senate tax committees to write legislation reducing taxes by $70 billion. The committees are still working on those bills.

The Senate reached its total of $39 billion in spending cuts through a combination of measures that would cut $69 billion and add $30 billion. Sen. Judd Gregg (R-N.H.), Budget Committee chairman, called the spending-cut legislation “a major step in the right direction.” The bill was supported by all 12 of the committee’s Republicans and opposed by its 10 Democrats.

But Sen. Kent Conrad of North Dakota, the committee’s senior Democrat, said that the tax cuts would far outweigh the spending cuts. “They call this deficit reduction?” he said. “Have words completely lost their meaning in this town?”

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Times staff writer Joel Havemann contributed to this report.