In Easing Offshore Drilling Ban, House Also Expands Energy Exploration Onshore

The measure would reverse ban on oil shale development and extend credits for renewable energy.

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The House of Representatives took a small step last night toward expanding domestic offshore oil drilling, and so far most of the rhetoric coming out of the fractious chamber has focused on whether the move goes far enough in the face of high gas prices.

But the House bill isn't just about offshore drilling. Indeed, other parts of the energy bill could prove just as—if not more—important to the country's energy future.

The bill, which passed 236 to 189 over strong Republican opposition, would, for example, remove long-standing restrictions on another potential source of domestic oil: oil shale, which is concentrated in Colorado, Utah, and Wyoming. According to the Interior Department, those areas contain an estimated 800 billion barrels of recoverable oil—nearly 40 times as much oil as the estimated amount that's currently off-limits offshore.

President Bush and many Republicans have long pushed to remove federal barriers to commercial oil shale development, but Democratic opposition, high exploration costs, and environmental concerns have stalled most efforts to develop oil shale in the region.

The House bill also focuses on renewable energy, which most members of Congress claim they support. Both the wind and solar industries have been pleading for Congress to renew their tax credits, which are set to expire at the end of the year. Experts say these credits are the single most important source of government support for renewable energy.

The House bill renews these credits, but the details here are important. The solar power credits would get renewed for eight years, but the wind power credits are extended for only one year. The discrepancy, observers say, reflects the feeling in Congress that wind power is "further along," even though both industries view themselves as still emerging.

At the moment, however, any extension would be better than nothing for the industries: Both of them report that large-scale projects (of wind farms or solar installations) have been suspended because developers are struggling to line up financing without the guarantee that the credits will be available next year. At least 21 major solar projects, totaling 5,400 megawatts of power (the equivalent of four to five new nuclear power plants), are currently on hold, according to the Solar Energy Industries Association.

Observers say it's unlikely that the Senate will hold a vote on the House's bill or take up its own comprehensive energy legislation before Congress adjourns later this month. The bill faces tough hurdles in the Senate, and President Bush has threatened to veto it.

Yesterday's House debate was rancorous, with Republicans decrying the Democratic proposal as a "sham" put forth by "extreme environmentalists" and arguing that in reality it will do little to ease restrictions on offshore drilling. Similar sentiments are shared by some Senate Republicans.

That probably means that the drilling debate—offshore or onshore—won't be settled anytime soon, but there's still some hope for renewable energy before the year ends. The two leaders of the Senate Finance Committee, Max Baucus, a Democrat, and Charles Grassley, a Republican, recently proposed a targeted bill that would renew the wind and solar tax credits.