House Senate conferees quickly settled an issue yesterday that two years ago helped kill a bill to revise rules for drilling for oil and gas on the outer continental shelf.
The near unanimity with which the conferees accepted a compromise offered by Sen. Henry M. Jackson (D-Wash.) suggested that after four years of trying, Congress this year probably will update the 25-year-old law as offshore drilling moves out of the Gulf of Mexico up the Atlantic Coast.
The major issue settled yesterday deals with the methods of bidding for leases on underwater lands stretching up to 200 miles off the U.S. coast.
A major purposeof the bill is to open up offshore drilling to smaller producers. Until now, drilling has been confined mostly to major companies because of the method of bidding employed. The usual method has been the cash bonus bid, which meant the lease went to the company that offered the most cash at the outset before it discovered any oil or gas. Smaller producers couldn't match the big cash offers of the majors.
The administration wants to open the process up to alternative methods, such as offering the government a specified share of profits.
The Senate bill require that not less than half the leases be sold under alternative bidding methods. The House limited alternative methods to between 20 percent and 50 percent.
Yesterday the Senate conferees voted 7 to 1 and the House members unanimously to provide that between 20 and 60 percent must be sold by bidding methods other than the cash bonus. There would be no congressional veto of the secretary of the interior's decision on the percentage, as the Senta provided. But he must pick the tracts on which alternative bidding method shall be shall be used at random, as the House provided, rather than selectively.
Rep. Hamilton Fish (R.N.Y.) who led the House fight two years ago that rejected the outer continental shelf conference report, congratulated Jack son for finding an acceptable compromise and said later he expects Congress will enact the bill this year.
Still to be settle is the issue of whether the federal government should be empowered, as the Senate required, to do exploratory drilling before taking bids on leases to determine the potential of the land. The House sided with producers, who prefers that the government not know how much the lease may be worth, in striking this from the bill. It was the other issue largely responsible for killing the bill two years ago.
On another energy front, a Senate subcommittee completed hearings on coal slurry pipeline legislation and will meet soon after the Fourth of July recess to vote on it.
The pipeline would move pulverized coal propelled by water hunderds of miles from the coal fields of such Western states as Wyoming to utility and industrial users in the Southwest. The legislation is needed to give the pipelines power of eminent domain to cross railroad and other property.
The railroads strongly oppose the legislation because they are the principal carries of coal and view slurry pipelines as competitors trying to take away their business. Opposition also comes from some state officials who fear loss of state control over their water supplies.
The bill has been approved by two House committees and may be taken up by the House in July. Pat Jennings, lobbyist for pipeline interests, said he believes there is a real chance Congress will pass the bill this year.