Oil and gas in Washington

Congress: Cantankerous and confused!

May 1998 Vol. 219 No. 5
Washington

Charles D. Matthews,
Contributing Editor

Congress: Cantankerous and confused!

Just over five months from now, the 1998 mid-term congressional elections will be held on the first Tuesday after the first Monday in November. That's not long for all the House members and a third of the Senators to make records to justify their constituents' support. These are indeed very difficult and trying times in Congress.

The Republicans have the most to lose because their majorities and leaderships in both bodies are on the line. So far, they are handicapped because of serious divisions among their own troops, and little leadership strong enough to consolidate them into one force. Consequently, they are moving somewhat slowly toward planning a minimal schedule of significant legislation. They also are apparently a little confused about how to react vigorously to the new twists in Judge Ken Starr's investigations.

Albeit Clinton's peccancies are more and more coming to light, he still gets good marks in popularity polls, in which a strong percentage of the public thinks they can separate his public and private lives. He also commands media attention like no one else. So, some of Clinton's super-high-priced, boiler room spinners want him to launch a hard "give'em hell" campaign against the "do-nothing Republican Congress," like Harry Truman did so effectively and successfully in the 1948 campaign against Tom Dewey, 50 years ago.

IPAA takes emergency action on falling oil prices. With U.S. producers facing some of the lowest oil prices in years, IPAA quickly formed an Oil Price Emergency Team (OPET) to seek federal action that could lessen the blow commodity prices are having on the industry. The team is working closely with IPAA's Executive Committee and Board of Governors to investigate solutions to the price situation, with particular focus on keeping America's marginal well producers in operation.

The team is headed by IPAA's Chairman George Yates and President Gil Thurm, with several other IPAA leaders and officials of the National Stripper Well Association (NSWA) filling out the cadre.

Chairman Yates and NSWA President Steve Layton sent a letter to President Clinton urging the Administration to address this problem. Members of Congress and key cabinet officials were also sent copies. The letter called on the President to issue an Executive Order or Presidential Proclamation to mitigate the national security threat of oil imports and to work with Congress to enact specific legislative measures that would preserve the domestic industry.

Particular attention was drawn to the 1995 administrative report that concluded, "U.S. dependence on oil imports threaten to impair national security." The Administration was requested to support the recommendations made in a 1994 National Petroleum Council report that called for a marginal well tax credit.

President Clinton was also called upon to work with Congress to stop the sale of $207.5 million of crude oil from the Strategic Petroleum Reserve (SPR) in FY 1998. OPET's fast action apparently has been paying off. It has been said that Energy Secretary Federico Peña (who has recently announced his resignation this summer) is working on various options to rescind the SPR sale and has let it be known that the Administration would not sell the oil while the prices are low.

Low oil prices didn't dampen Central Gulf lease sale. The Department of the Interior's most recent oil and gas lease sale in New Orleans was a winner, attracting the third-highest number of bids on Central GOM leases. Seventy-four oil companies put up $810.4 million in high bids for offshore drilling rights. The total number of bids was 1,188, on 794 tracts, with a dollar value of $1.35 billion. The Central Gulf sale last year posted the record 1,790 bids on 1,032 tracts valued at $1.2 billion.

"The lease sale bodes very well for continued activity in the Gulf," said NOIA's then Chairman, Robert E. Rose, President and CEO of Diamond Offshore Drilling, Inc., at a press briefing in New Orleans. He went on to observe, "I hadn't anticipated that bidding was going to be this high or this competitive." NOIA President Bob Stewart, participating in the briefing, said he was also surprised by the size and competitiveness of the single bids. "It tells me the companies' long-term views for commodity prices are optimistic. Some of the high-volume deepwater wells can still make money at weaker crude prices."

House passes "Tucker Shuffle Relief Act." The House passed H. R. 992, to end the Tucker Act shuffle by a recorded vote of 230 to 180. This margin is not wide enough to override the White House's threatened veto. The bill gives property owners broader access to federal courts in property rights disputes with the federal government. The name of the bill was changed to the "Tucker Shuffle Relief Act" because it would end the system in which property owners must take their claims against the government to separate courts.

The Tucker Act would bar the U.S. Court of Federal Claims from hearing cases for injunctive relief; and bar U.S. District courts from hearing claims for monetary relief over $10,000. Opponents of the measure, including the Clinton administration, said the bill raised serious constitutional questions and would give federal courts far more power to overturn environmental protections.

The House last year passed a broader measure to expedite property owners' access to federal courts. The Senate Judiciary Committee recently passed a bill that incorporates the House measures and its broader counterpart.

Charles D. Matthews is president of Charles Matthews & Co., consultants and advocates on government relations, Arlington, Virginia.

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