House Democrats today are optimistic about moving a bill taking oil out of the Strategic Petroleum Reserve, but Wednesday appeared to be the beginning of the end for Senate debate over curbing oil market speculation.
The Senate bill looks irreversibly stymied as Majority Leader Reid filed cloture on the measure Wednesday amid disagreement with Republican leaders over how many amendments could be offered.
Republicans are expected to have enough votes to deny Reid the 60 votes he needs Friday to limit further debate.
On Wednesday morning, Reid offered the idea of having each side offer one amendment each regarding oil and gas drilling. Minority Leader McConnell objected and then unsuccessfully offered his own plan to consider only energy-related amendments and keep the speculation bill as the pending measure on the floor.
McConnell suggested the same dilemma might present itself if a petroleum reserve bill on the House floor today makes it over to the Senate.
"Why don't we do something significant for the country?" McConnell told reporters when asked about the House bill. "There is a lot of bobbing and weaving going on on the other side. ... Why not have a real debate; let everybody vote?"
The House bill is an example of a partnership on energy issues between a liberal Democrat -- Rep. Edward Markey of Massachusetts -- and an oil-patch Democrat -- Rep. Nick Lampson of Texas. That ideological bridge will probably be lifted when Lampson today introduces a bill promoting greater oil and gas drilling exploration.
But both lawmakers are backing today's plan to release 70 million barrels of light sweet crude oil from the petroleum reserve in six months, with 20 million barrels of that mandated to be released in the first 60 days.
This is so "the marketplace knows the American government is going to use this huge asset," Markey told reporters. The light sweet crude would have to be replaced with heavier crude within five years.
The benefit of the switch-out -- backers say -- is that light sweet crude is supposed to offer more bang for the buck and produces more gasoline and other fuel per barrel.
Lampson dropped language from his original bill sending revenue to renewable energy and other programs. "Basically, I saw an opening that we could get this through and I think that this will have an impact on the price of oil and help the consumer immediately," Lampson said. "Something was better than not doing anything right now and I took my opportunity."
But the oil industry is lobbying against the bill. One oil refinery lobbyist said the bill could unintentionally reduce refinery capacity by about 10 percent and jack up the price of heavier crude because not all refineries are equipped to refine light sweet oil.
Refineries along the coast and in the Gulf are more generally designed for heavier crude, as opposed to Midwestern refineries that are more broadly designed for light crude, the lobbyist said.
But Lampson said the fact that heavier crude is in the Gulf near where the reserve resides is good for national security and that heavy crude is increasingly coming on line in the form of Canadian oil sands and should keep the price of heavy crude stable and drop the overall price of oil by an undetermined amount.
Regardless, the refinery lobbyist acknowledged that enough oil-patch Democrats and Republicans will side with the usual majority of Democrats and probably will have enough to get the two-thirds majority needed to pass the bill under suspension of House rules.
"We're extremely optimistic at the chances of passage," a Democratic leadership aide said. "People know that this is something that's been done before; using the [reserve] as a tool to reduce prices in and of itself."
House Speaker Pelosi's summer energy agenda has had mixed results and the bills offered can be generally lumped into two categories: contentious items that fall just short of getting the two-thirds needed under suspension or those that win overwhelmingly but are derided by GOP leaders as safe votes.
The petroleum reserve bill appears to fall closer to the latter category. "Who cares? It's a Band-Aid," said a spokesman for Minority Leader Boehner, who will vote against the bill.
The White House and Republican leaders also say it should be kept for supply emergencies. "The point is that there are other things that can be done and should be done first," said Rep. Marsha Blackburn, R-Tenn.
An argument could be made that Democrats are offering the reserve bill as another way to avoid a tough vote on expanding areas to drill for oil and gas, especially since it comes under suspension and does not allow Republicans to offer a drilling amendment.
Lampson said he will have co-sponsors for his drilling bill, which he has also submitted for consideration as part of a larger effort led by Reps. Neil Abercrombie, D-Hawaii, and John Peterson, R-Pa., that seeks a compromise on gas prices.
"They like it a great deal," Lampson said, referring to the bipartisan group that met Wednesday night. "In the end it will be a compromise."
Lampson declined to provide details of his drilling bill but said it is part of a "significant effort" to rally behind greater research for alternative energy sources "as well as doing things with exploration of oil and gas. All of that."
Pelosi next week wants to bring up a bill curbing oil market speculation. The House Agriculture Committee will mark up that bill Friday.
Reid Wednesday also filed cloture on going to a bill boosting funding for the Low Income Home Energy Assistance Program that the Senate will vote on Friday.
This article appeared in the Saturday, July 26, 2008 edition of National Journal Daily.
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