"DRILL-NOTHING" DEMOCRATIC MAJORITY READIES LEGISLATION LOADED WITH POISON PILLS AIMED TO KILL NEW AMERICAN ENERGY PRODUCTION

September 15, 2008

House Democrats are scrambling to complete their latest "no energy" bill, which is expected to make its way to the House floor later this week. The problem for House Speaker Nancy Pelosi (D-CA) is that the longer it takes for the bill to be introduced, the more the American people are learning about the Majority's bogus "drilling" legislation that fails to lower gas prices for working families, small businesses, seniors, and schools. And that's not good news for the Speaker or rank-and-file Democrats who hope to mislead their constituents back home that they are actually poised to vote for a "pro-energy" bill.

Reports already indicate that the Democrats' "no energy" bill will not include critical revenue-sharing between the federal government and coastal states - a poison pill that will lead states to block energy production off of their coasts and effectively kill any new "drilling" under the bill. On the heels of these reports, Fox News reporter William La Jeunesse noted this afternoon that the faux "drilling" language in the Democrats' bill actually blocks energy production in some of the most oil- and gas-rich locations off our nation's coasts. In total, Speaker Pelosi's latest proposal permanently locks away an incredible 88 percent of the best American oil resources on the Outer Continental Shelf. A transcript and full video of the Fox News report follows:

for Video

MARTHA MCCALLUM: Offshore drilling of course, is a hot topic on the campaign trail and on Capitol Hill. This is something a lot of Americans are passionate about. You remember the big oil spill off of the coast of Santa Barbara in 1969 but now a lot of Californians are actually rallying to end the ban on drilling if you can believe that. The Santa Barbara Board of Supervisors making a move to support drilling again 100 miles off of their coast. But will it ever happen" William La Jeunesse is live from beautiful Santa Barbara, California today. William, are Californians coming around to the idea of drilling off the shores of their home state?

WILLIAM LA JEUNESSE: Well, California is very symbolic of the U.S. as a whole. We use more oil here than anyone other than the United States and China. Now you can see right out here we've got vast reserves in the Pacific. There's a straw right there. There is more oil between Santa Barbara and San Diego than the Eastern Seaboard or the Eastern Gulf. Now as you said, we came to Santa Barbara for a very good reason because this is the birthplace of the ban on offshore drilling and yet as you said, the board of supervisors is reconsidering after that devastating spill in '69. This would be like the people of Chernobyl voting for nuclear power. Now, I'm going to take you into the truck real quickly, to give you a look at the national picture Martha and what is happening tomorrow in Congress. This is a look right now, at oil resources in the United States offshore. About 3.8 billion barrels off of the Eastern Seaboard, about 3.7 off the Eastern Gulf, and about 11 billion off the Pacific Coast. Now, this is important because this is what they're going to be talking about. That is California right there. Currently, the state limit is about 3 miles so if they lifted the ban entirely they could go after this oil. They are talking about putting the limit at 50 miles. Now the state legislature could go from 50 to 100 miles if they want. That's not going to happen in California. You'd have drilling off 100 miles, but all the oil is right here, and that is why experts say about 80 to 88 percent of all of the oil in the country is off-limits under the two bills being considered in Congress.

This is important as well because this deals with facts versus fear. The oil industry, according to government statistics, in the last 15 years, has produced about 156,000 barrel of oil and for every one of those, we lost one barrel. That is literally a drop in the bucket. That is a debate that is going to begin tomorrow in Congress probably for a good two weeks about whether the U.S. should lift this ban. Energy critics say this is an energy bill in name only, that it is not going to deliver the oil that consumers say that they want. Back to you.

MCCALLUM: What a great report, William. That has made things so clear. Wasn't it though" This is the kind of debate and people say we need to drill off of our shores and I think a lot of people think that is a good idea but then you get into this Congressional debate and things get stymied, so we're going to end up with an agreement perhaps that allows us only to drill in areas where the oil is not.

TRACE GALLAGHER: And what William has reported on before which he left out of this is the fact that he said one barrel of oil spilled. More oil seeps through the ground off the coast of California than is ever spilled out there so you're going to have much more environmental damage. William, am I right here" You're still on camera. Much more oil seeps through the ground than is ever spilled?

LA JEUNESSE: That's right Trace. About 60 percent of all of the oil in the marine environment has come there natural from seepage. And then followed by consumers in runoff from urban areas. The amount of oil that comes out of platform and drilling is less than three percent. A much bigger risk and environmentalists admit this are tankers. So you have 2,000 tankers going around the world and that is why it is more dangerous than simply tapping it using offshore drilling but this is just one of those bellwether issues that environmentalists are banking on because they fear if we have more oil, that makes alternative energy technically more expensive and only prolongs the period we are on fossil fuels and that is the much bigger debate that is going on in Congress. Kind of the story behind the story. Why we may have an energy bill with no energy.

MCCALLUM: No, it's a great story and just one last thought on it. There is all of this pressure about the oil companies and oh they make so much money. Oil companies have spent a tremendous amount of money researching and making this process as clean as possible and they have done a pretty good job of it when you look at the numbers of what actually gets spilled out there, it's extremely minimal. So, something everyone needs to know to get the full picture.

GALLAGHER: And that was pretty much the full picture.

Republican Leader Press Office

Rep. John Boehner (R-OH)

H-204, The Capitol

(202) 225-4000

"How a family deals with issues and teenage children, that shouldn't be the topic of our politics, and I hope that anybody who is supporting me understands that's off-limits," Obama, who hopes to be the first black-American US President was quoted as saying by CNN.

Bristol Palin, a senior in high school, is about five months pregnant, US media reports said.

The Palins and the John McCain campaign decided to reveal the information now because of rampant internet rumours that Sarah Palin's 4-month-old baby, who has Down syndrome, was actually Bristol's.

Obama became annoyed when asked about a report that quoted an unnamed senior McCain aide as saying that Obama's name appears in liberal blogs speculating about Trig's (Sarah Palin's son) parentage "in a way that certainly juxtaposes themselves against their 'campaign of change.' " "I am offended by that statement," the Illinois senator retorted, not letting the reporter finish his question. "There is no evidence at all that any of this involved us.

"We don't go after people's families; we don't get them involved in the politics. It's not appropriate, and it's not relevant," he added.

"Our people were not involved in any way in this, and they will not be. And if I ever thought that there was somebody in my campaign that was involved in something like that, they'd be fired," the 47-year-old father of two girls said.

U.S. Rep. Don Young, Ranking Member

1329 Longworth H.O.B.

Washington, D.C. 20515

(202) 225-7749

www.house.gov/resources/republicans

September 15, 2008

OCS Oil & Natural Gas Production Could Provide $800 BILLION

For The United States In Royalties & Corporate Tax Revenues...

But Speaker Pelosi's OCS Ban & Restrictions Would Permanently

Shut Down 88 Percent Of Offshore Energy Production

Washington, D.C. - According to a new Congressional Research Service (CRS) analysis, the untapped American energy resources in currently off-limit OCS areas represent a potential $801.5 billion in federal royalty and corporate income tax revenue - if we choose to develop them.

With the Congressional ban set to expire on September 30, the Democratic Leadership has introduced a bill to permanently prohibit production of almost all of these resources - along with the $801.5 billion in federal revenue that would be generated as result of tapping our own energy supplies.

CRS estimates that OCS oil and gas production in areas currently off limits to energy production could produce $518.5 billion in royalty revenues and an estimated $283 billion in corporate income tax revenues - a total of $801.5 billion.

"Unfortunately, Speaker Pelosi's bill is cleverly written to appease the national environmental organizations to essentially prohibit any OCS oil and natural gas production," said U.S. Rep. Don Young (R-Alaska), the Ranking Member on the House Natural Resources Committee.

"This is unbelievable because we have the potential of earning more than $800 billion from OCS production while providing almost 18 billion barrels of oil for the American public.

"But this will all be moot because Speaker Pelosi's bill will permanently prohibit the production of 88 percent of this OCS oil. This Democratic bill will impose irreparable harm to the U.S. economy and our domestic energy production."

Pelosi Bill Would Ensure Little, If Any, OCS Energy Production

There are an estimated 17.84 billion barrels of oil in OCS areas. Pelosi's bill would ban production of 88 percent of America's OCS oil.

According to Pelosi's OCS formula:

0 to 50 Miles Offshore: Under Pelosi's bill, no oil or natural gas production could happen anywhere in the United States within 50 miles of the coastline.

The Mineral Management Service (MMS) estimates that most of the undiscovered oil is within the 50 mile area that Pelosi would permanently ban from production.

The MMS estimates that off the Pacific Coast, most of the undiscovered oil is within 25 miles of the coast.

50 to 100 Miles Offshore: Pelosi's bill gives individual states the choice to "opt in" to authorizing federal oil and gas leasing in OCS areas that are 50 to 100 miles from their coastlines.

The MMS estimates that only 0.287 billion barrels of oil are available in these areas off of Washington, Oregon and California.

100 Miles Offshore: OCS areas more than 100 miles are open to oil and gas development under Pelosi's bill.

Republican "American Energy Act" Would Increase Energy Production

& Raise New Revenues

In contrast, the Republican Leadership's "American Energy Act" would allow access to all 18 billion barrels of OCS oil, and direct nearly $200 billion of the federal share of royalty revenue into an Alternative Energy Trust Fund to "bridge the gap" between the energy of today and the next generation of renewable and alternative energy.

In addition, the Republican bill taps ANWR's 10.4 billion barrels and directs $51.3 billion of the estimated $152 billion in federal royalty and tax revenue generated by tapping that off-limits American energy resource.

For more information, access the Committee on Natural Resources' Minority website at:

http://republicans.resourcescommittee.house.gov/default.aspx

Contact: Steve Hansen (Republican Communications Director) (202) 225-7749

Meredith Kenny (Communications Director/Rep. Don Young) (202) 225-5765

# # #

Steve Hansen

Director of Communications

Republican Staff

U.S. House Committee on Natural Resources

1329 Longworth HOB

Washington, D.C. 20515

(202) 225-7749

Second, Azerbaijan is dithering between competing Russian and EU bids for its gas exports, which are crucial to bringing Nabucco on line in 2012 as planned.

Third, in the long term, Azerbaijani gas alone will not be sufficient. The EU official said that "other countries in the region" must supply most of the 31 billion cubic meters (bcm) of gas Nabucco is expected to carry by 2020.

But Iran, with the world's second-largest reserves, remains off-limits as long as it continues to enrich uranium. And Turkmenistan, with its enormous export potential, has yet to decide whether to invest in a trans-Caspian pipeline linking it to Azerbaijan -- and Nabucco.

The common thread for all these countries, and the EU as the ultimate beneficiary of the 3,300-kilometer-long pipeline, is the question of intent and commitment.

EU Makes Its Case

On November 5-7, EU Energy Commissioner Andris Piebalgs will visit Turkey and Azerbaijan to demonstrate the bloc's continued commitment to Nabucco.

"The first objective of this trip is to show the political commitment of the European Commission to the Nabucco project and to reaffirm once more that we are convinced that it is going to be online according to the planned timetable," says Piebalgs' spokesman, Ferran Tarradellas.

The Russian-Georgian conflict sent shock waves through the region and among potential investors. But official Brussels remains steadfast in the belief that Nabucco is safe from Moscow's interference. "Russia would jeopardize its reputation as a reliable supplier" to the EU if it acted in any way to damage Nabucco, said one official.

However, none of Nabucco's essential building blocks is currently in place. Turkey continues to hold out for a better transit deal while Azerbaijan has yet to formally commit its gas exports to the project.

Tarradellas says that while Piebalgs' visit is a sign that the EU is upping the ante in its talks with the two countries. "We're going to discuss also the remaining differences with the Turks and the question of the transit of the gas through Turkey," he says, "and then we're going to be visiting Azerbaijan, which will be probably be the first supplier of gas for the Nabucco pipeline."

The senior EU official who spoke on condition of anonymity said that, apart from charging a transit fee, Turkey wants to divert 15 percent of Nabucco's gas for cheap domestic use. As Azerbaijan is insisting on selling its gas at European market rates minus transit costs, the Nabucco consortium and its subsidiaries in Turkey, Bulgaria, Romania, Hungary, and Austria would be left to pick up the tab.

Piebalgs is keen to break the deadlock before the end of the year. In Turkey this week he will meet with the country's president, prime minister, foreign minister, and economy minister.

Where Will Gas Come From?

Azerbaijan, meanwhile, has yet to decide to whom to sell the estimated 7-9 bcm of gas it is able to export annually in the early years of Nabucco's operations. The senior Brussels official said EU companies are pitted against Russian competitors. There are fears in the EU that Russian political pressure could clinch the deal for Russian bidders. A decision is expected sometime in 2009.

EU officials say that the fact that Piebalgs has secured a meeting with Azerbaijani President Ilham Aliyev is a sign of "interest" on the part of Baku in doing business with the EU.

But Azerbaijan's gas reserves, even if supplemented by the planned expansion of the Shah Deniz field, will not be sufficient to keep Nabucco in business.

And this is where Nabucco currently hits a wall. Iran will remain untouchable in trade terms as long as it refuses to cease uranium enrichment. Like Azerbaijan, Turkmenistan and Kazakhstan can be swayed by Moscow's cash -- or outright pressure. And even if Turkmenistan's recently confirmed reserves of 14 trillion bcm dwarf Russia's own transit capacity, Moscow will be seeking to deny the EU a piece of the pie.

Piebalgs is hoping to soon visit Turkmenistan and Kazakhstan, his aides say.

This leaves Iraq and Egypt as the only other viable regional suppliers for Nabucco -- with one extremely unstable and the other rather remote.

Meanwhile, EU officials reject suggestions Nabucco could eventually carry Russian gas diverted south. This, they say, would defeat the purpose of Nabucco -- which is to diversify supplies. (Competing Russian projects, such as South Stream, are not seen as a problem, however. The EU's growing demand for gas will make sure it has a market and the diversification of transport routes is a good in itself).

If the degree of insecurity associated with the 8 billion-euro ($10.3 billion) project coupled with the global financial crisis is making potential investors nervous, officials in Brussels remain serene. When pressed, they do point out, however, that should private investors balk, public lenders such as the European Investment Bank and the World Bank stand ready to step in.

Copyright (c) 2006. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036. www.rferl.org