House passes bill to speed Arctic drilling

The House on Wednesday passed legislation that would accelerate offshore drilling in the Arctic by curtailing environmental reviews of coastal oil exploration projects.

The measure, sponsored by Rep. Cory Gardner, R-Colo., and Rep. Gene Green, D-Texas, aims to remove legal and regulatory barriers that have stalled Shell Oil Co.’s bid to drill in Arctic waters near Alaska. But the bill’s reach extends beyond the Arctic, and Democrats said the legislation could chip away at the power of California and other states to regulate air pollution.

Bill backers said the legislation would fix  “a broken bureaucracy” that has mired critical Clean Air Act permits in tussles between the Environmental Protection Agency and its administrative review panel, the Environmental Appeals Board.

“The EPA needs to have a permit approval system in place that is predictable (and) workable,” Green said. Instead, “we continue to see air permits for offshore exploration wells go back between the EPA, the producer and the Environmental Appeals Board with no movement to a solution.”

Although Shell hoped to launch work on its first exploratory well in the Beaufort Sea near Alaska after ice cleared this summer, the company scrapped those plans in February, after the appeals board revoked two EPA-issued air quality permits. The panel faulted the EPA for not fully reviewing potential emissions from a drill ship and support vessels.

The legislation would set a six-month deadline for the EPA to take final action on air permit applications, and it would bar the appeals board from reviewing permits for exploratory drilling.

Rep. Pete Olson, R-Texas, said those changes would “improve EPA’s decision making and air permitting . . . and restore much-needed certainty to that regulatory process.”

The legislation also would:

  • block the EPA from regulating emissions from vessels that service offshore drilling operations.
  • limit Clean Air Act reviews of offshore drilling projects to their impacts they would have on air quality onshore, effectively stopping those reviews at the shoreline.

The bill would not affect permitting in the Gulf of Mexico, where the Interior Department, not the EPA, is in charge.

The measure faces an uncertain future in the Senate, where the top Republican on the Energy and Natural Resources Committee, Lisa Murkowski of Alaska, is advancing a similar proposal. Murkowski could push for such Arctic drilling provisions as part of broad offshore drilling legislation the panel is on track to advance this summer.

Several key House Democrats, including Rep. Henry Waxman, D-Calif., acknowledged the current air permit process could be improved. But instead of making “sensible” changes, Waxman said, “this bill waives environmental requirements and short circuits public reviews.”

“It is a giveaway to the oil industry that will increase pollution along our nation’s coasts,” added Waxman, the top Democrat on the House Energy and Natural Resources Committee.

Politics infused Wednesday’s debate.

Ahead of the vote, the Chamber of Commerce urged lawmakers to support the legislation and warned it might include the bill in its annual legislative scorecard. The National Republican Congressional Committee, the campaign arm for House Republicans, targeted politically vulnerable Democrats with a news release describing them as having “anti-energy policies.”

Democrats fought back with amendments designed to put Republicans in a tough spot politically. But the GOP turned back all of the proposed changes, including one by Rep. Bill Keating, D-Mass., that would have required companies to disclose executives’ bonus pay in air permit applications. Another defeated proposal, by Rep. Peter Welch, D-Vt., would have forced the oil and gas companies to reveal their government subsidies.

Democrats dismissed the bill as political demagoguery by Republicans.

Rep. Jared Polis, D-Colo., insisted that the U.S. needs a real solution to its thirst for energy, instead of  a sound bite approach and “drill baby drill” politics aimed at the 2012 elections.

Rep. Gerald Connolly, D-Va., called the bill  a “token of appreciation” to the oil industry whose political donations helped the GOP take over the House.

Oil and gas industry leaders cheered the bill’s passage.

“Streamlining the EPA air permit process is a necessary step for removing roadblocks to developing America’s energy resources,” said Marty Durbin, executive vice president of the American Petroleum Institute. “We cannot leave exploration and production of critically needed resources in a perpetual state of limbo.”

But the Obama administration came out strongly against the bill, saying it would “curtail the authority of the EPA under the Clean Air Act to help ensure that domestic oil production on the outer continental shelf proceeds safely, responsibly and with opportunities for efficient stakeholder input.”

Shell is now seeking to drill up to four exploratory wells in the Beaufort Sea and six wells in the nearby Chukchi Sea. It has filed exploration plans for those sites with federal offshore drilling regulators. At the same time, the company and EPA are working on refining a new set of air permits. Assistant EPA Administrator Gina McCarthy told a congressional panel in May that Shell and the EPA were close to developing “a strong permit” that would withstand any future appeals board scrutiny.

Other companies, including Conoco Phillips and Statoil, also hold oil and gas leases in the Chukchi and Beaufort seas.