January 13, 2006

In This Issue


Citing the desire to “alleviate some of the pressure” for energy needs, the U.S. Department of Interior announced plans that it would open some 400,000 acres of Alaska’s North Slope for exploratory drilling. Much of the 23.5 million-acre petroleum reserve is already open to oil development. Created in 1923, the reserve is located west of the Arctic National Wildlife Refuge, a point of continuing debate over allowing drilling versus protecting the environment. Critics of the announcement voice concern over potential harm to geese, caribou, and tundra swans that use the area. The Interior’s Bureau of Land Management maintains that technological advances will minimize negative impacts on wildlife but said that further studies would be conducted before allowing permanent drilling.


Backers of wider offshore drilling, stymied in 2005, are planning new legislative efforts this year to tap more oil and gas on the outer continental shelf (OCS). Supporters of new access will likely argue that high winter heating bills bolster their case, especially with respect to natural gas. Timing could be key, because if offshore access legislation does not move early, its chances could diminish as the weather warms.

But several sources say moving offshore drilling legislation and other controversial bills this year will be complicated by the Jack Abramoff corruption scandal in the House, the House leadership shake-up and the approaching midterm congressional elections.

The major goals of those seeking to expand offshore drilling are providing states the ability to “opt out” of leasing bans that now cover most areas outside the western Gulf of Mexico, opening the Gulf of Mexico’s Lease Sale 181 area, in addition to creating state-federal revenue sharing. Also, an even more aggressive effort to lift offshore bans for natural gas drilling — spearheaded by Rep. John Peterson (R-PA) — has attracted nearly 120 cosponsors so far.

The National Petroleum Council estimates nearly 80 trillion cubic feet of natural gas lies in restricted offshore areas. Current U.S. consumption is about 22 trillion cubic feet yearly and expected to rise.

Senate Energy and Natural Resources Committee Chairman Pete Domenici (R-NM) has said he plans to take up legislation to expand access on the OCS this year. Meanwhile, Sen. Bill Nelson (D-FL) is reportedly readying legislation that would provide long-term protection for the eastern Gulf of Mexico. He and Sen. Mel Martinez (R-FL) both oppose allowing exploration and production any closer to Florida’s shores.

House Resources Committee Chairman Richard Pombo (R-CA) may revive his plan to allow states to opt-out of leasing bans, share in offshore revenues, and open much of the Gulf of Mexico’s coveted Lease Sale 181 area, which is not part of formal restrictions. The Pombo measure had been attached to budget reconciliation legislation in the House but was jettisoned along with Arctic National Wildlife Refuge drilling provisions to help win majority support.

Several industry groups are reviving efforts to win new access. The Industrial Energy Consumers of America is planning a February “fly-in” to bring its membership into Washington to press the case. The group last month called Congress’ adjournment for the year amid near record natural gas prices without addressing the issue “irresponsible.”

The National Association of Manufacturers and other industry groups pushed hard for new access at the end of last session. The U.S. Chamber of Commerce is also expected to press the issue again. Several industry groups expressed their continued interest in expanded offshore access in recent comments to the Department of Energy, which is preparing a study of natural gas supply and demand mandated by the recently enacted energy law.

The Bush administration has the power to open the Lease Sale 181 area administratively. The Minerals Management Service, an arm of the Interior Department, is expected to release its draft 2007-2012 OCS leasing plan later this month. The service has been under pressure to open the wide swath of the 181 area to leasing, and the Interior Department has indicated support for development in that area.

The “stovepipe” section that juts up toward the Florida panhandle is not expected to be offered — the Bush Administration has committed itself to preventing leasing within 100 miles of the Florida coast.


A recent report published in the journal Sciencexpress said salvage logging following the 2002 Biscuit Fire in Oregon destroyed nearly three-fourths of seedlings that had regenerated naturally and increased the risk of future wildfires. The report implies that forests are better off without intervention from forest managers, either for salvage logging or replanting.

But the timber industry and those on Capitol Hill who believe it is necessary to streamline the Forest Service regulatory process to allow salvage and restoration work to proceed more quickly on national forests say the report has limited and incomplete findings and will not have any effect on legislation under consideration in the House and Senate.

Doug Crandall, Staff Director of the House Forests Subcommittee, disagreed with the findings of the OSU report and noted that “It’s always our scientists versus your scientists, it makes it really difficult for the public to sort through all that.”

At issue are two bills designed to streamline a process that can often take several months, and in some cases, years, as the Forest Service and environmentalists often disagree over the necessity and scope of salvage projects. Many western lawmakers and the timber industry have long complained the time required to approve salvage projects on federal lands has caused the trees to lose value to the point where such projects are not cost effective.

A bill (H.R. 4200) sponsored by House Forests Subcommittee Chairman Greg Walden (R-OR) and Rep. Brian Baird (D-WA) would give the Forest Service and Bureau of Land Management (BLM) 30 days to evaluate and recommend any restoration work following catastrophic wildfires or storms that affect more than 1,000 acres. Damage to between 250 and 1,000 acres would be evaluated at the agencies’ discretion. Following the review period, the Forest Service or BLM would propose emergency restoration and reforestation projects.

Sen. Gordon Smith’s (R-OR) companion bill (S. 2079)also includes language encouraging the use of mediation to avoid litigation and sets hard deadlines for Section 7 consultations required under the Endangered Species Act.

The Biscuit Fire burned nearly 500,000 acres in 2002, primarily in the Rogue River-Siskiyou National Forest, with federal agencies spending $153 million over five months to extinguish it. President Bush used the area as the backdrop that summer to unveil his Healthy Forests Initiative designed to streamline procedures for thinning and hazardous fuels reduction.


Six of the world’s major polluters wrapped up climate talks this week in Sydney, Australia with a multi-million-dollar pledge to develop clean energy, but said polluting fossil-fuels would continue to underpin their economies for generations.

In a communiqué at the end of the talks, the six nations did not set any targets to cut greenhouse gases. Instead, the United States, China, Japan, India, South Korea, and Australia stressed the need for business to help find ways of cutting greenhouse emissions without hurting fossil fuels or impacting on the growing demand for energy, particularly in China and India. The six countries account for nearly half the globe’s greenhouse gases emitted by humans.

“What this is, is … a harnessing of the private sector. It is recognizing the fact that it is the private sector that makes the investment decisions, in all of the countries,” U.S. Energy Secretary Sam Bodman told reporters.

It was the inaugural meeting of the Asia Pacific Partnership on Clean Development and Climate, which the six nations set up as an alternative way to tackle global warming outside the Kyoto Protocol by focusing on clean-energy technology.

A goal of the partnership is to convince industry to take the lead in developing and installing cleaner energy that cuts carbon dioxide and other by-products of burning fossil fuels.

The partnership agreed to set up eight industry-based taskforces to develop new clean energy schemes that would be backed by the technology fund. The taskforces will submit plans by mid-2006.

Australia kick-started the technology fund with $75 million over five years and Bodman said he would request $52 million in the 2007 budget.

The United States and Australia refuse to sign the Kyoto Protocol, claiming its mandatory greenhouse gas cuts would threaten their economies.

Sources: Environment and Energy Daily; Greenwire; Reuters; The Washington Post