Losing On Drilling

So we're going to lose on this drilling thing. Well, maybe. Despite the fact that additional drilling as a means to lower gas prices makes no logical sense, the problem is that the moratorium on offshore areas needs to be reaffirmed annually by Congress. It usually gets rolled over in a continuing resolution to keep the government working. But the Republicans have signaled their intention to block any effort to reinstitute the ban, and it's likely they have the votes, at least in the Senate, to do that. Plus, Speaker Pelosi is already announcing that there will be a bill with drilling. There is, however, a catch.

WASHINGTON (Reuters) - House Speaker Nancy Pelosi said on Saturday when the U.S. Congress returns next month from its summer recess, Democrats will offer legislation that could give oil companies drilling access to more offshore areas.

In the Democrats' weekly radio address, Pelosi of California said expanding drilling areas would be part of a broader bill which addresses other energy issues [...]

Pelosi said the legislation would require oil companies to pay billions of dollars in drilling royalties, which would be invested in clean energy resources.

Democrats also want to release supplies from the U.S. emergency oil stockpile to help lower gasoline prices, increase drilling in an Alaskan oil reserve that is already open to exploration and require utilities to generate a portion of their electricity from renewable sources like solar and wind energy.

In addition, Pelosi said, the legislation would seek to rein in excessive energy market speculation that many U.S. lawmakers blame for running up crude oil and gasoline prices.

"This comprehensive Democratic approach will ensure energy independence which is essential to our national security, will create millions of good paying jobs here at home in a new green economy, and will take major steps forward in addressing the global climate crisis," Pelosi said.

The gambit here is that Republicans will never back removing subsidies for oil companies, being then seen as frauds, but I don't even see that in this iteration of the bill. Of course, the bipartisan "Gang of 10" bill does include that aspect.

Even then, I don't see how Republicans suffer any more than normal from being in bed with Big Oil. They've won the opening round of the debate, and Democrats are negotiating with themselves. Meteor Blades explains the reality here:

There is a widespread – though far from universal view – that accepting the Gang's approach is the politically astute, expedient and smart thing to do. Undercut the GOP advantage on the drilling issue by yielding to the inevitable, as some have put it, and thereby inoculate Democrats on Election Day. A cheap bargain, the argumnet goes, because companies will never drill anyway or the new President can reverse the deal come January.

Thus, on the cusp of a new administration, after 27 years of lousy energy policies that have brought us to our current situation, there is a scurry to pass a cobbled-together energy policy – still not completely written – with just a couple of weeks of discussion. One final victory for a lame-duck administration run by oil men and their pals whose secret energy meetings on government time we are still not privy to. Odds are there will not be a reversal of this policy once passed.

Just one of the areas that deserves far more debate is, surprise, oil and gas leasing. When leases on private land pay royalties of 12% to 25%, why should taxpayers only receive 12% to 16%? What about decades of royalty underpayments on taxpayer-owned land and Indian tribal land and allotments? What about the 68 million acres already being leased but not being drilled? Why grant more oil-shale leases when the five current demonstration leases are years from producing commercially viable oil from a source whose promise of bonanza has failed three times in the past 120 years, bankrupting dozens of companies and soaking up hundreds of millions of dollars in government subsidies? [...]

As unlikely as is finding 60 votes in the Senate and 218 in the House to renew the ban, it's nothing compared with getting the 67 Senate votes and 290 House votes required to override a Bush veto. And if the ban is attached to a continuing resolution, then the question arises: Who wins the battle over drilling vs. everything else the government does?

No Social Security checks go out, Veterans' Administration hospitals start turning people away, and, of course, gas prices remain near $4. With three weeks to sort it all out, right in the middle of a watershed election campaign, who would really "pay a terrible price in November"?

The smart money says we're headed for another lame energy policy, not a far-sighted, planet-friendly, grandchildren-friendly, well-integrated, comprehensive package of proposals but a mish-mash of contradictory elements that nudges us into a different lane of the disastrous road we've been hurtling down since we took our first sip of Saudi crude six decades ago.

I think that's the most likely scenario. And it's not like you're going to get an honest rendering of this debate from a media, when their convention coverage is owned by Exxon Mobil, for example.

I think at this point I prefer the "praise the Lord" approach to the problem over anything Congress does. After all, prices have gone down 35 cents in the past month - prayer works!

(That's the other thing, nobody seems to be focusing on the fact that prices are way down, and it's because demand is down, no thanks to the politicians. If policies were put in place to encourage lower demand - investments in transit, telecommuting, flex hours, smarter urban planning - prices would go down vastly more than the "drill and hope" scenario. Why has not one Democrat made that argument in public?)