Big Oil whines that it’s something for nothing
The oil industry has figured out what I’ve been saying for weeks: The Senate Gang of 20 swap of limited, offshore drilling for lots of clean energy is something for nothing. I hope Congressional Dems figure that out, too, and vote for the darn thing in droves.
The key fact to bear in mind is that the Congressional moratorium on offshore drilling expires at the end of this month! If no compromise deal passes either as a stand-alone bill or as part of the catchall spending bill needed to keep the government going past Sept. 30, then the moratorium ends and “that would allow drilling within three miles off all coasts,” as The Washington Post explained Sunday.
But the Gang of 20 bill — 233-page Discussion Draft here [PDF] — severely limits offshore drilling to a handful of Southeastern states that must opt in and moves the drilling boundary to 100 miles offshore (from its current 200 miles) “with states given the option to set it at 50 miles.” So now Big Oil whines:
Some industry experts question the effect of the proposals, citing federal studies that show that more than 80 percent of known oil reserves are inside the 50-mile limit and therefore unavailable. Very little is known about oil reserves beyond 100 miles. Waters off almost the entire Pacific coast — where all three governors oppose drilling at the 50-mile barrier — is considered too deep for drilling 100 miles offshore.
“You would just open a door to an empty room at the end of a very long hallway,” said Brian Kennedy, spokesman for the Institute for Energy Research, an organization funded by the oil industry. Kennedy also said that, without some sort of revenue sharing for state governments, there would be little incentive for states to approve additional drilling.
(Note to Post: If you are going to write “Some industry experts question the effect of the proposals” then please do better than quoting a single spokesman from a Big-Oil-funded institute or else use the phrase “Some industry representatives …”)
I am still waiting for someone to explain to me why House Dems couldn’t just sign on to the bipartisan Senate proposal:
Instead, led by House Speaker Nancy Pelosi (D-Calif.), they are offering a mix of proposals that would allow drilling, with the waters off Massachusetts, Virginia and Georgia most likely to be the first affected …
House and Senate Democrats have been assembling different proposals for the past few weeks after absorbing months of Republican criticism as gas prices soared. Under pressure from moderate Democrats fearful of November election losses, Pelosi took the first formal step Wednesday by unveiling a proposal that would open the Atlantic and Pacific coasts to drilling at least 100 miles offshore. If governors and state legislatures agree, drilling off each state’s coast would be allowed 50 miles from shore …
Pelosi had previously suggested opening only portions of the southeastern Atlantic coast and some of the eastern Gulf of Mexico to drilling, but ultimately offered to allow drilling off both coastlines. The eastern gulf off Florida’s west coast would remain off-limits …
Under the Pelosi bill, scheduled for a vote Tuesday, the federal government would not share royalties with the states, devoting the money instead toward federal funding for renewable energy resources. Taxes on oil companies would be increased, with that revenue also going to alternative energy sources.
If the House and Senate cannot pass very similar bills before Sept. 30 — and how could they if the House is pursuing a very different bill from the bipartisan compromise already embraced by 20 Senators — then the only other way to limit offshore drilling after Sept. 30 is by grafting legislation onto the continuing resolution that will be needed to keep the government funded past the end of the fiscal year.
Such a decision would dare Bush to veto the legislation and shut down the federal government over the GOP’s preferred drilling plan.
That might be a good idea — if the legislation were widely perceived to be balanced and bipartisan, like the Gang of 20 bill, but maybe not like whatever the House Dems are now pushing. As a friend of mine used to say, we’ll burn that bridge when we get to it.
UPDATE: E&E Daily reports the obvious ($ub. req’d) this morning:
One oil industry lobbyist said the Gang of 10 plan is the measure that has the greatest likelihood of winning 60 votes, though it remains unclear if any measures will win that filibuster-proof majority. “Once they are on the floor they may start cutting deals,” this lobbyist said.
The industry lobbyist predicted that regardless of the upcoming debate on energy packages, the drilling fight will be decided through the spending process. “I still think we are going to have a CR battle with OCS as the main component,” the lobbyist said.
The Gang of 10 backers are already making a hard sales push. Just last week, in a bid to gain support from Alaska’s senators, the sponsors added revenue-sharing for Alaska. The Alaska lawmakers are in talks with the sponsors of the Gang of 10 plan, Senate aides said.
The good news is that at least the Senate Dems seem to be getting this right:
Democrats used their weekly radio address Saturday to tout energy legislation — and take shots at Republicans for blocking legislation that extends renewable energy tax credits, alleging their plans rely too heavily on fossil fuels, citing the now-famous “drill, baby, drill” chant at the GOP nominating convention.
“This week in the Senate, that choice will be clear as day. Democrats will be offering comprehensive energy solutions,” said Sen. Ken Salazar (D-Colo.) in the radio address. He went on to say: “Republicans have to decide whether they just want to talk about our energy problems on the campaign trail, or whether they will work with Democrats to actually solve them.” Salazar is a cosponsor of the Gang of 10 plan.
The House may vote tomorrow, but it’s not clear when the Senate will be voting. Here are extended excerpts from the E&E Daily piece:
In the House, votes are expected as soon as tomorrow on Democratic legislation that would allow drilling more than 100 miles from the Atlantic and Pacific coasts, and as close as 50 miles from shore if coastal states agree to it. A ban on leasing out to 125 miles from Florida’s Gulf of Mexico shores would remain until 2022.
In the Senate, Majority Leader Harry Reid (D-Nev.) wants to begin debate this week on at least three competing energy plans that include varying degrees of offshore drilling. They are a Democratic proposal that Sens. Jeff Bingaman (D-N.M.) and Max Baucus (D-Mont.) plan to propose; a bipartisan measure by the so-called Gang of 10, which has since grown to 20; and a GOP measure.
Bingaman, chairman of the Energy and Natural Resources Committee, said Friday that he sees a consensus emerging that some new areas of the outer continental shelf (OCS) should be open to drilling. And in the House, Democratic leaders have signaled they want to cut a deal on limited increases in coastal access, lest the bans lapse completely at the end of the month. But it remains unclear if the Senate, let alone Congress and the White House, can reach an agreement.
“That,” Bingaman said Friday when asked about the prospects for a deal, “is a tougher question.”
It is especially tough because the issue is bound up with the presidential election, and each side is wary of handing the other a victory — in the legislative or public relations realms.
Democratic leaders, who have long opposed removing current protections, are for the moment tying drilling to many of their own priorities that many Republicans oppose, such as repeal of oil industry tax breaks and, in the House, a mandate that utilities supply escalating amounts of renewable power. The tax break repeals and renewables mandate both faltered in the Senate last year.
Republicans, meanwhile, have found a campaign rallying cry in pushing for more domestic production and have thus far called Democratic plans inadequate amid high energy prices.
These crosscurrents are evident in the House Democrats’ bill — which has not yet been unveiled — that is coming to the floor this week.
The bill has helped House Speaker Nancy Pelosi (D-Calif.) keep conservative members of her caucus in the fold as the GOP calls for more aggressive measures, winning praise and cosponsorship from Rep. Gene Green (D-Texas). Rep. Mike Ross (D-Ala.), who helps lead a group of conservative Democrats called the Blue Dogs, last week praised Pelosi for bringing up a bill with wider drilling for a vote.
Liberal members of the caucus, meanwhile, appear willing to support the bill as well. Pelosi, who for weeks refused to allow votes on relaxing the leasing bans, has said that absent a deal that allows some new drilling, the existing protections will vanish and areas just a few miles from shorelines will be open.
That is because the coastal leasing bans are renewed each year through Interior Department spending measure. But Republicans say the upcoming continuing resolution (CR) to maintain federal spending past the Sept. 30 end of the fiscal year should not contain the bans. Natural Resources Chairman Nick Rahall (D-W.Va.) flatly said last week that supporters of the bans lack the votes to maintain them through the CR.
Indeed, the notion that Democrats should try and salvage what they can in an environment where the pro-drilling forces have momentum has also gained traction — or at least acceptance — among some environmental groups.
The Sierra Club is calling for any energy measures to include major support for “clean” sources of energy, such as the tax credits and renewable power mandate. Democrats and activist groups also cite Energy Information Administration analysis showing that new OCS access would not significantly affect domestic production or prices for decades.
Republicans and industry, however, say Pelosi’s plan does not do nearly enough to provide industry access to leasing bans that currently cover both coasts and the eastern Gulf of Mexico. President Bush lifted overlapping executive bans over the summer …
A Democratic energy proposal that includes drilling and other measures is expected to be unveiled as soon as today, Bingaman said Friday.
Bingaman will be unveiling policy provisions to go along with tax measures Baucus outlined late last week that include extension of expiring renewable energy tax breaks and other alternative energy incentives, funded in part by repeal of the Section 199 deduction for the largest oil companies and other revenue from the industry.
However, Reid may also try to move renewable energy tax legislation ahead of debate on broader energy bills.