House leaders drop Arctic drilling proposal from budget bill

House leaders abandoned an attempt to push through a hotly contested plan to open an Alaskan wildlife refuge to oil drilling, fearing it would jeopardize approval of a sweeping budget bill Thursday.

They also dropped from the budget document plans to allow states to authorize oil and gas drilling off the Atlantic and Pacific coasts regions currently under a drilling moratorium.

The actions were a stunning setback for those who have tried for years to open a coastal strip of the Arctic National Wildlife Refuge (ANWR) to oil development, and a victory for environmentalists who have lobbied hard against the drilling provisions. President George W. Bush has made drilling in the Alaska refuge one of his top energy priorities.

The House Rules Committee formalized the change late Wednesday when it issued the terms of the debate when the House takes up the budget package on Thursday.

The decision to drop the the ANWR drilling language came after Republican moderates said they would oppose the budget if it was kept in the bill. The offshore drilling provision was also viewed as too contentious and a threat to the bill, especially in the Senate.

Last week, the Senate included ANWR drilling in its version of the budget, so the matter will have to be thrashed out in negotiations between the Senate and House, if the budget is approved by the House.

Protection of the Alaska refuge from oil companies has been championed by environmentalists for years. The House repeatedly has approved drilling in the refuge as part of broad energy legislation, only to see their effort blocked each time by the threat of a filibuster in the Senate.

The budget bill is immune from fillibuster, but drilling proponents suddenly found it hard to get the measure accepted by a majority of the House.

That's because Democrats heartily oppose the overall budget bill, giving House Republican opponents of drilling in the Arctic enough leverage to have the matter killed, reported AP.