In recent years, Congress has not shown much interest in energy-related issues, due in no small part to consumer contentment with cheap gasoline.
But when very low oil prices combined with job losses in the oil patch, Congress started paying attention.
As a result, the first session of the 106th Congress showed a dramatic increase in activity on issues affecting the petroleum sector. Legislation was enacted to create a loan guarantee program for independent producers, extend tax credits for marginal wells, resolve oil royalty issues and increase research funding.
Progress proved more elusive for efforts to reauthorize major environmental statutes or resolve the controversy over public lands.
Loan Guarantees and Tax Relief
In August, President Clinton signed the Emergency Oil and Gas Guaranteed Loan Act of 1999, legislation spearheaded by Sen. Kay Bailey Hutchison (R-Texas). The new law established a $500 million guaranteed loan program to assist qualified independent oil and gas producers and service companies distressed by low prices and foreign competition.
In October, the Department of Commerce released detailed regulations governing an initial application window lasting until Dec. 30, 1999. More application windows may open up in the future.
(Additional information about the program can be found by searching the department's Web page at http://www.doc.gov.)
Just before adjourning in November, Congress passed a bill (H.R. 1180) extending a number of tax provisions that were set to expire in 1999 or 2000. Of most interest to the oil industry is a one-year extension, to 2001, of the current suspension of the net income limitation on percentage depletion for marginal wells.
Industry research budgets may benefit from a five-year extension of the research and experimentation credit that allows companies a 20 percent tax credit on qualified research expenditures.
The tax extender bill was a compromise with President Clinton, who had vetoed more comprehensive tax-cut legislation that Congress passed in August. The earlier bill included a number of oil and gas-related provisions in addition to the percentage depletion one passed in the later bill.
Those provisions included creation of a net operating loss carry back for five years for independent producers, and allowances for expensing of delay rental payments and for expensing of geological and geophysical costs.
Oil Royalty Reform
Even after legislation makes it into law, partisan gridlock between Congress and the White House can put up roadblocks to implementation.
A good example is the landmark Federal Oil and Gas Royalty Simplification and Fairness Act, enacted in 1996 to revamp the way that the federal government collects royalties from oil and gas leases on federal lands.
In that case, Congress -- dismayed by the Administration's regulatory interpretation of the new law -- kept the Minerals Management Service (MMS) from finalizing revised regulations for two years, running in the hopes of negotiating a better deal.
The package of spending bills passed just before Congress adjourned in November included a compromise extending the moratorium on the new regulations until March 15, 2000.
MMS quickly announced that it was reproposing its revised regulations and would hold public workshops in January before a final version is published in March.
(Details on those meetings will be placed in the Federal Register once arrangements have been made. They should also be available on the MMS website at http://www.mms.gov.)
Despite the apparent conclusion of this regulatory struggle, many congressional leaders remain staunchly in favor of a shift to accepting royalty in kind, allowing the government to obtain the best price it can for its share on the open market.
So far, however, efforts to move such legislation have not progressed beyond the committee level.
Fossil Energy R&D Funding
Congressional support for petroleum-related research and development (R&D) was up this year. Funding for the Department of Energy's Fossil Energy R&D program rose to $419 million, up 9 percent over the previous year.
Such an increase could hardly have been expected after the president requested an 11 percent cut, and the House passed a 27 percent cut. All areas of research in the program -- coal, fuel cells, oil and natural gas -- saw increases.
Both the House and Senate passed similar bills authorizing a methane hydrate research program for five years. Final passage is expected early in 2000.
Also, the National Geologic Mapping Reauthorization Act has been sent to President Clinton for his signature. The bill calls for a major expansion of funding for geologic mapping conducted by the U.S. Geological Survey, state geological surveys and universities.
Little Progress in Public Lands, Environment
Many of the issues most important to petroleum geologists extend well beyond the oil and gas industry. Half of AAPG's position statements address environmental and public land issues.
Progress in these areas has been slow, and common ground has been in short supply.
Earlier in the year, it looked like a narrow Superfund reauthorization bill focused on brownfields and liability reform might achieve bipartisan consensus. But disagreements over reinstating the Superfund tax put an end to action in 1999 with slim hopes that it may be taken up again in 2000.
As was done in the last Congress, legislation was introduced to prevent the president from declaring future national monuments in the manner in which he created the Grand Staircase-Escalante National Monument in Utah in 1996. H.R. 1487 passed the full House as well as the Senate Energy and Natural Resources Committee, but appears unlikely to make further progress in the face of considerable opposition from conservation and national park groups.
What's Ahead?
The second session of the 106th Congress begins on Jan. 24. This being an election year, few bills are likely to pass through increasingly partisan waters. The attention of both Democrats and Republicans will inexorably shift away from finding compromises and toward scoring political points at their opponent's expense.
In such an atmosphere, the likelihood of significant progress in high-profile areas, such as the environment or tax policy, is remote.
The campaign season does represent an opportunity for the geoscience community to take stock of its issues and encourage candidates to address them, perhaps cultivating new allies in the new century to come.