House Speaker Nancy Pelosi (D-CA) is showing new interest in a Republican-backed drilling bill, crafted by a bipartisan group, that supports both renewable energy and increased offshore oil and gas production, but does not include last year's contentious tax roll-back package opposed by Big Oil, House sources tell EnergyWashington. Though these sources would not go so far as to predict Pelosi will drop her tax plans for Big Oil, they say Pelosi's interest in the bipartisan group's bill indicates a significant position change from a month ago, when sources close to the Speaker indicated she did not take the effort seriously and was not looking to give it floor time.

The bill, The National Conservation, Environment and Energy Independence Act (H.R.6709), was compiled early in August through a bipartisan coalition of Republicans and Democrats led by Reps. Neil Abercrombie (D-HI) and John Peterson (R-PA). Congressional sources are suggesting that Pelosi is in the fine-tuning stages of putting together a Democratic bill that could be released as soon as the week of Sept. 8 when Congress returns. Her interest in the Abercrombie-Peterson bill could mean she is looking for items the GOP can support, moving away from what many fear would be an effort to stall energy legislation into the November election.

At this point, however, those in the bipartisan camp are in a wait-and-see situation, as they anticipate possible deliberations over the weekend (Sept. 5-7) with Pelosi and other members of the House leadership to adapt portions of H.R.6709 and help shape Pelosi's bill. Congressional sources point out the fact that the Abercrombie-Peterson bill is a "finished" piece of legislation, where Pelosi is still in the drafting stage of her bill. They say it would behoove her to at least consider it in formulating a Democratic drilling bill. There are indications she has been sifting through other pieces of finished legislation, such as a bill offered by the head of the Democratic Caucus, Rahm Emanuel (D-IL) -- the fourth highest ranking Democrat in the House -- that supports natural gas vehicles (see related story). Sources say Emanuel's bill is likely to be included in the final Democratic energy bill.

Supporters of H.R. 6709 are expected to tell Democratic leaders that the key to passing legislation in the Congress is the removal of windfall profit tax provisions that tax experts consider regressive and the maintenance of drilling tax incentives first given the industry in the 2005 energy law. Pelosi argues for removal of these incentives. Another sticking point may be NOPEC provisions, i.e. measures that ostensibly provide the ability to sue OPEC when it appears they have been unfairly driving up the price of oil, but have serious credibility issues with global legal experts -- but sources say the NOPEC issue is of lesser importance to both sides.

Emanuel had been looking to set up a meeting on the Abercrombie-Peterson bill this week -- it was thought on the behest of Pelosi -- when it was learned that Pelosi, herself, has taken the helm in pulling together a meeting to discuss the bill with Rep. Abercrombie. The House bipartisan bill had been the subject of discussion during several sideline conversations at the Democratic National Convention, and continues to be a subject of almost daily conversations with Senate staff linked to the so-called "Gang of 10" bipartisan effort being considered by Majority Leader Harry Reid (D-NV), say congressional sources.

House sources say this close coordination with the Senate would ultimately mean quick passage of a bill, especially if Pelosi intends to use the Abercrombie-Peterson effort as a way to reach agreement on legislation, moving it quickly to the Senate, and getting something viable to the President's desk.

Many in the H.R.6709 camp have expressed anxiety that Pelosi meant to use energy legislation as a means to stall the debate going into the election by excluding measures the GOP could support, according to staffers. But increased pressure upon the Democratic Party to show it is concerned over increased energy costs has likely forced Pelosi into a position to consider making her bill more bipartisan, say observers.