Wednesday, September 24, 2008

Democrats will let the offshore drilling moratorium expire next week, caving in to Republicans weeks before the election and potentially opening the outer continental shelf to expanded oil and gas exploration for the first time in a generation.

Still, the surrender - a major victory for congressional Republicans and President Bush - could be short-lived. The drilling would not begin for at least a year, and Democrats hope to reimpose some sort of ban before any new wells are sunk, setting up the first bruising battle of the next administration.

The White House made it clear any new drilling provision was a non-starter. The future resolution of offshore drilling will have to be addressed with a new president,” said Drew Hammill, a spokesman for House Speaker Nancy Pelosi, California Democrat.

Democrats now can turn the focus to addressing the Wall Street crisis, which they think they can tie to Mr. Bush and Republican presidential nominee Sen. John McCain.

“If true, this capitulation by Democrats following months of Republican pressure is a big victory for Americans struggling with record gasoline prices,” said House Minority Leader John A. Boehner, Ohio Republican.

With gas prices topping $4 a gallon this summer, the issue dominated election campaigns for weeks. House Republicans staged a sit-in on the House floor during Congress’ August recess to highlight their push.

Polls showed voters across the political spectrum and even in places such as Florida, where expanded drilling had been considered anathema, were now in favor of expanded drilling. Mr. Bush lifted an executive ban on offshore drilling in July, putting pressure on Congress to act.

The congressional moratorium prohibits oil and gas leasing on most of the outer continental shelf - three miles to 200 miles offshore - and expanded oil shale mining in the West. The moratorium was enacted in 1982 and has been renewed every year since.

Democrats’ only option for extending the moratorium would have been to include it in a catchall spending measure to keep the government open past Sept. 30, when the current fiscal year expires. But with the White House considering a veto and House Republicans ready to uphold it, Democrats were faced with being blamed for shutting down the government in order to block more drilling.

Environmental groups said they see a chance to keep fighting.

“Regardless of what happens in the [spending measure], everybody knows that’s not the last word on energy in this Congress or in the year ahead,” said Josh Dorner, a spokesman for the Sierra Club.

House Democrats last week tried to find a middle ground, passing a bill to expand drilling but still leaving most known reserves off-limits. But with the financial crisis crowding out the legislative schedule, it’s unlikely the Senate will pass that bill, and Mr. Bush has promised a veto.

Neither Mr. McCain nor his Democratic opponent, Sen. Barack Obama, had immediate comment on the Democratic leaders’ decision.

Mr. McCain flipped his stance this year to embrace expanded drilling, while Mr. Obama is generally opposed, though he said he would consider more drilling if it is coupled with other energy provisions.

The Interior Department estimates there are 18 billion barrels of recoverable oil beneath coastal waters now off-limits.

Options open to Democrats next year include trying to pass a modified ban, or, if Mr. Obama wins the White House, reimposing an executive order. The next president also could have the Interior Department move slowly to accept any new drilling applications.

While it won’t have the moratorium, the catchall spending measure will include $25 billion in loan guarantees for the Big Three automakers; $23 billion for disaster relief; $600 billion for defense, homeland security, veterans issues and military construction projects; and $5.1 billion for energy assistance for the poor, said senior House Democratic aides.

The spending bill won’t include several measures opposed by Republicans, such as widespread infrastructure projects, an extension of unemployment benefits, increasing the food stamp program or increases in Medicaid federal matching funds.

Democrats said they will include those provisions in a future economic stimulus package, aides said.

cSean Lengell contributed to this report.

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