Congress Debating End of Offshore Drilling Ban

Published on
by
The San Francisco Chronicle

Congress Debating End of Offshore Drilling Ban

by
Zachary Coile

Offshore drilling, such as Chevron's Discoverer Deep Seas drilling ship in the Gulf of Mexico, will be a hot topic in Congress this week as legislators discuss lifting the federal moratorium. (Alex Brandon / AP)

Washington - Congress opens a historic debate today over lifting the federal
moratorium on offshore drilling, which for nearly three decades has
blocked oil and gas development along most of the Pacific and Atlantic
coasts.

In a strange election-year twist, House Democrats will lead the push
to eliminate the ban and give states the right to drill off their
shores. Most Republicans, who have sought to end the ban, plan to
oppose the bill, saying it would still keep too many coastal areas
off-limits.

The legislation marks a reversal for Democrats, including House
Speaker Nancy Pelosi, who has fought fiercely to stop offshore drilling
during her two decades in Congress. But high gas prices, relentless
pressure from the GOP and polls showing strong support for drilling
have forced Pelosi to yield.

Democrats hope to put Republicans on the spot by tying new drilling
to measures to strip oil companies of billions of dollars in tax breaks
and to require electric utilities to use more wind and solar power -
proposals Republicans oppose and President Bush has repeatedly
threatened to veto.

Pelosi also has crafted the bill carefully to limit the scope of new
offshore production. Waters within 50 miles of shore would be
off-limits. States could choose whether to drill between 50 and 100
miles, but would be offered no financial incentives - such as a share
of oil royalties - for taking the environmental risk of putting oil and
gas rigs off their shores.

The bill would let the federal government decide whether to drill
more than 100 miles offshore. But drilling supporters note that the
distant location of the areas would make it more difficult to drill and
to deliver oil and gas to shore.

"This is ingenious," said Rep. Don Young, R-Alaska, a leading
advocate for more offshore drilling. "The Democratic leadership can say
they tried to open some (Outer Continental Shelf) areas for production,
but by eliminating the revenue-sharing provision none of the states
will want to have production off their shores. The Democrats can claim
credit for 'trying' to boost oil production while at the same time
prevent any new energy production from occurring."

Strong opposition

The proposal has also earned the scorn of environmental groups,
Democrats' traditional allies, who fear that party leaders are opening
a Pandora's box by lifting the ban.

"We're against it because of the drilling," said Anna Aurilio, the
Washington representative for Environment America. "The right thing to
do is to pursue clean-energy solutions that will reduce our dependence
on oil. The wrong thing to do is to drill more."

The bill could have vastly different impacts in different parts of the country.

Only four states - Virginia, Georgia, South Carolina and North
Carolina - have expressed interest in allowing drilling off their
coasts. But without a share of multibillion-dollar royalties, it's
unclear whether any governors or state legislatures would choose to
allow drilling.

In California, Gov. Arnold Schwarzenegger and the state Legislature
oppose new drilling. The Democratic-led Assembly and state Senate
recently passed resolutions urging Congress to preserve the moratorium.

State has big reserves

California is believed to hold large reserves - more than half of
the estimated 18 billion barrels of recoverable crude oil nationwide
that are off-limits because of the drilling ban, according to the
Interior Department's Minerals Management Service. But under the House
plan, 95 percent of those resources would still be unavailable because
they are within 50 miles of shore.

By contrast, along the Atlantic coast, 2.8 billion barrels of the
3.5 billion recoverable between Virginia and Georgia are within the
zone from 50 to 200 miles offshore that could be opened under the bill.

House Democrats say they were backed into a corner on the drilling
issue. President Bush lifted the presidential moratorium on drilling in
July. The congressional moratorium expires Sept. 30, and Republicans
have threatened to force a government shutdown if Democrats try to
renew the ban as part of a temporary spending measure that must be
passed to keep the government funded.

Expiration threat

If the moratorium expires, the Bush administration could immediately
begin preparing new lease sales, where oil companies would bid for the
right to drill tracts along both coasts.

"We have to face the reality that if we don't have something in the
bill, it is drilling 3 miles offshore," Pelosi told reporters last
week. States currently have control over only the first 3 miles of
their coastline, while federal control extends to 200 miles offshore.

Republicans have improved their political fortunes by pounding the
energy issue relentlessly. A Gallup Poll conducted after the GOP
convention showed Republicans in a dead heat with Democrats - 45 to 48
percent - on the generic ballot, which tests which party's candidate
voters say they will support this fall. Analysts have been predicting
the GOP will lose House and Senate seats, but the poll suggests the
party could fare better than expected.

GOP leaders see little incentive to compromise with Democrats on the
drilling issue. In the Senate, some Republicans criticized their GOP
colleagues for backing a bipartisan plan that would revoke tax breaks
to oil firms, subsidize biofuels and renewable energy, and let four
Southern states opt out of the drilling ban. Sen. John Cornyn, R-Texas,
the Republican Conference vice chairman, told the Roll Call newspaper,
"From a political standpoint, I think it does sort of muddy the
message."

Democrats are frustrated that they haven't been able to win over the
public with their argument that drilling won't bring gas prices down.
The U.S. Energy Information Administration concluded that lifting the
moratorium would offer no short-term relief at the pump and would have
an "insignificant" effect on oil prices in 2030.

"The Republican argument that 'drill here, drill now' will save
people money isn't a policy discussion. They have caught a political
wave that has found some traction," said Rep. Mike Thompson, D-St.
Helena. "It's unfortunate that a lot of people have taken the bait, the
political bait, on this Republican scam."

Tie-in with Ike possible

Capitol Hill watchers believe there's little chance the House and
Senate can reach a deal on an energy bill before they recess in
October. But Democrats have another option: They could attach their
language limiting the scope of new drilling to a temporary spending
bill that includes disaster relief for states hit by Hurricane Ike -
which would be more difficult for Bush or Republicans to oppose.

Drilling backers believe Democrats will blink first to avoid being
portrayed as anti-drilling just weeks before the Nov. 4 election.

"Rhetorically, they have put their members on record as being in
support of drilling - which is an about-face from their position as
recently as a year ago," said Brian Kennedy, senior vice president of
the Institute for Energy Research and a former aide to House Minority
Leader John Boehner, R-Ohio. "It certainly puts Democrats in the
position of having to put their money where their mouths are - if not
now, sometime in the future."

 

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