Washington (Platts)--31Jul2008

Though Democratic leaders in the US Congress have managed to avoid it so
far, they may be forced to hold a vote on offshore oil and natural gas
drilling before October 1, it emerged Thursday.

On that date, funding for all federal programs will expire, and must be
extended. This year, most programs will likely be funded by a continuing
resolution until January, when a new president takes office.

Every year for nearly three decades, Congress has included in its annual
spending legislation a prohibition on drilling on much of the Outer
Continental Shelf. This year, that appropriations ban is the only thing
standing between the nation's oil and gas companies and access to acreage on
the OCS.

President George W. Bush lifted his own ban on the OCS earlier this
month. Earlier this week, Senator Robert Byrd of West Virginia, who chairs the
Senate Appropriations Committee, said he believed an OCS drilling amendment
would be successful in his committee if it were offered. Byrd canceled a vote
on a supplemental spending bill to avoid this possibility.

An amendment "repealing the two-decade-old ban on offshore oil and gas
drilling would be successful, resulting in the necessity of having to produce
60 votes on the Senate floor to strip the repeal," said Byrd, the Senate's
senior Democrat.

Three Senate Republicans who sit on the Appropriations Committee -- Kay
Bailey Hutchison of Texas, Pete Domenici of New Mexico, and Christopher Bond
of Missouri -- have said they would offer an amendment during this year's
appropriations process that would strip the prohibition on offshore drilling.

"Repealing the moratorium on OCS drilling is a bad idea," said Byrd. "It
is a sham solution intended to quiet the understandable anger of voters in an
election year over the high price of gasoline. Such drilling will have no
impact on gas prices for years and will only mean more profits for the oil
companies."

Nonetheless, Byrd fears that if the offshore drilling amendment were
successful in his committee, Senate rules would require a 60-vote
supermajority to restore the prohibition language on the Senate floor. This
week's struggle over energy issues on the Senate floor have proved that more
than 41 senators support increasing access to domestic petroleum, and would
likely vote against restoring the moratorium once it was cut from the bill.

Asked about Democrats' chances of passing a spending resolution with an
offshore moratorium, Majority Leader Harry Reid said: "We'll have to wait and
see what happens. That's months away."

An aide agreed that a vote on offshore drilling would likely be part of
the mix. "Somehow, we will have to deal with that," he said.

--Jean Chemnick, jean_chemnick@platts.com