By Coral Davenport, CQ Staff

Status: Concern over oil prices, offshore drilling and energy policy in general were ever-present themes, cropping up repeatedly on Capitol Hill and providing grist for election campaigns for much of the year. Republicans won a victory on one of their top priorities: ending a moratorium on offshore drilling. Congress also cleared a set of tax breaks to encourage production and use of renewable energy sources. Virtually all other energy-related legislation stalled in the face of partisan disputes.

Synopsis: Democratic leaders were unable to break the partisan impasse on most energy legislation and had to concede defeat on offshore drilling.

• Offshore drilling. Republicans galvanized public outrage over pain at the pump, enough to tip opinion polls in favor of lifting a 26-year-old moratorium on oil and gas drilling off the Atlantic and Pacific coasts. GOP members repeatedly sought to put Democrats on the spot, raising the issue on bill after bill in the Senate and stalling other legislation, including the year’s appropriations bills. They even came to the House floor over the August recess to press the issue.

After resisting for months, House Democrats responded in September, passing a bill (HR 6899) to open extensive new areas to drilling. But, in what Republicans said was a poison pill, the bill would not have given states a share of the royalties, diminishing states’ interest in participating. Democrats finally gave in, as the price for clearing a stopgap spending bill (PL 110-329) to continue funding domestic programs into the new year. It was the first time since 1982 that the offshore drilling ban, part of the Interior spending bill, was allowed to lapse. The continuing resolution also allowed the expiration of a ban on drilling in the Rocky Mountain west for oil shale.

The sudden absence of the drilling ban allows drilling up to three miles off the entire U.S. coastline, a prospect that made many Democrats and some coastal-state Republicans uneasy. While environmentalists are campaigning to have the bans reinstated under a new Democratic administration, many Democratic lawmakers say that’s politically unrealistic. Still, Democratic leaders in the 111th Congress are expected to press legislation to create some restrictions and barriers to drilling in the newly open waters, including strict permitting processes and environmental reviews.

• Energy tax credits. At the last minute, Congress renewed $16.9 billion in tax credits for power generated from wind, solar and other clean alternative sources. The longstanding tax credits were set to expire Dec. 31, and lawmakers had been trying to push them through all year with no success, despite strong bipartisan support. The hang-up had been how — and whether — to pay for them. But that objection seemed to pale in comparison to the prospect of a $700 billion financial services rescue package (PL 110-343). The tax credits were folded into the final version of that package in what was viewed in part as a sweetener for House members who initially voted against the bailout.

• Multiple bills. The tax credits and change in offshore drilling came after months of heated partisan sniping over energy, during which both parties and both chambers called repeatedly for broad, comprehensive energy legislation but were unable to build the bipartisan consensus necessary to advance any measures of significance. Many efforts stalled or failed, including attempts to rein in speculation on energy commodity trading (HR 6604, S 3268), to expand drilling while investing as much as $20 billion in developing renewable and alternative energy technologies, and a “use it or lose it” proposal (HR 6251) to compel oil and gas companies to drill on federal land that they had leased or risk losing their leases.

In May, lawmakers did coalesce behind one very narrow measure: Congress cleared a bill (PL 110-232) that freezes shipments of oil to the nation’s Strategic Petroleum Reserve (SPR), instead releasing it to the open market, as long as oil prices remain above $75 a barrel. But with oil prices now hovering around $50 a barrel, that law has little effect.

Legislative Action:

House passed HR 6022 (SPR), 385-25, on May 13.

Senate cleared HR 6022 by voice vote May 14.

President signed the bill May 19.

Senate rejected cloture motion on S 3268 (futures trading), 50-43, on July 25 (60 votes required).