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Drilling fight could prompt government shutdown

When Congress reconvenes in September, the fight over offshore oil drilling is set to collide with must-pass legislation that is needed to prevent the federal government from shutting down when the fiscal year ends on September 30.

Several House Republicans told reporters last week that they would vote against a stop-gap funding measure, known as a continuing resolution, if it extends a moratorium on new offshore drilling and another, related ban on oil-shale production.

If the CR does not pass or President bush vetoes it, most federal agencies would be forced to shut down as of October 1.

"I'm voting against the CR; I don't care what it shuts down," said Representative Louie Gohmert, a Texas Republican. Gohmert and others were part of an August recess sit-in in the Capitol last week aimed at forcing House Speaker Nancy Pelosi to hold a special session of Congress to vote on expanded drilling. Congress adjourned August 1, and is scheduled to resume September 8.

Representative Roy Blunt of Missouri, the Republican whip, said Democrats would be to blame if the government shuts down come October 1. "The big issue in the CR is whether or not Democrats are going to continue to have bans on offshore drilling and bans on oil shale," he said.

Blunt, the second-ranking House Republican, declined to say if he would vote against a stop-gap spending bill that included the drilling and oil-shale bans.

Congressional leaders in both chambers began hinting early this year that they would use a CR to tide over the federal government until a new president takes office in January 2009. Democratic leaders and appropriators say the decision was made in order to avoid negotiating with President Bush, who has threatened to veto any appropriations bills that exceed his spending fiscal 2009 budget request.

House Democrats suspended work on fiscal 2009 spending bills after Republicans tried to force a vote on an amendment that would have stripped the Outer Continental Shelf drilling ban out of the Interior Department's funding measure. Republicans also tried to attach a similar amendment to an emergency supplemental spending bill, which prompted Democrats to cancel the entire process until further notice.

Bush lifted an executive-branch ban on OCS drilling earlier this year, leaving the congressional ban as the only impediment to additional drilling. If no action is taken to extend the ban, it will expire on October 1.

The soon-to-come fight over inserting the drilling ban in the CR could play out in many different ways. But the worst-case scenario is a government shutdown, which is an extremely risky proposition in a tightly contested election year. This last happened in 1995, when a Republican-led Congress opted to allow spending laws to expire rather than fund former President Bill Clinton's budget priorities.

Voters assigned Republicans most of the blame for the shutdown, and some say it helped get Clinton re-elected in 1996. Senate Majority Leader Harry Reid and others have held up the specter of that year whenever Republicans have threatened to block the CR. But former House Speaker Newt Gingrich, who spearheaded the Republican-led shutdown of the government in 1995, came to the Capitol last week to tell reporters that Democrats would be to blame if another shutdown is prompted by the drilling issue.

"Are they really prepared to close the government in order to stop drilling?" Gingrich asked, adding that that would be a "suicidal strategy" before this November's election. "Democrats won't survive if they have an anti-energy policy," he said, adding that voters were beginning to recognize that Republicans were acting to reduce oil and natural gas costs, while Democrats served as "anti-energy obstacles".

But a Republican energy policy insider said the GOP might be "once bitten, twice shy" about shutting down the government to enforce their policy priorities. "Both sides will try to play a game of political chicken," he said. "I just don't know if Republicans think they can win this one."

Whether Republicans ultimately attempt to defeat a CR with moratoria language or not, they seem ready to use the threat as leverage. Senator Kay Bailey Hutchison, a Texas Republican, said before the recess that she would force a vote on offshore drilling as part of the CR debate. She and other Senate Republicans could filibuster the measure, requiring the Democrats to find 60 votes in order to pass the bill by October 1.

Even some Democrats have hinted that they might oppose a CR if it continues the drilling ban. Representative Gene Green, a Texas Democrat, said last week that "it would be real hard to support a CR with the price of gasoline the way it is." Green said he hoped that he and other like-minded Democrats could persuade Pelosi to hold a vote on drilling before the CR vote.

Pelosi has all but taken such a vote off the table, however. During a televised interview last weekend with George Stephanopoulos, Pelosi seemed to suggest that a drilling bill could come up for a vote on the House floor. "Maybe it will [get a vote] as part of a larger energy package," she said.

The speaker, who brought a series of energy-related bills to the floor in June and July under rules that prohibited any amendments, made it clear that she had no plans to hand Republicans the vote they were looking for. "They'll have to use their imagination on how to get a vote," she said. "And they may get a vote."

A Pelosi aide said he did not anticipate a government shutdown. "I think September is going to be a difficult month. It's going to be a difficult fight, but one we welcome," he said, adding that opponents of lifting the ban on offshore drilling were on the "right side of the facts," since doing so would not bring down the price at the pump.

Created: August 13, 2008

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Platts Product and Services Highlight Drilling fight could prompt government shutdown | Oil | Platts 2008-08-13

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