Drilling and Clean Energy

Conservatives Resist Compromise

Congressional conservatives won’t take “yes” for an answer on offshore drilling because it doesn’t help their Big Oil patrons, writes Daniel Weiss.


House conservatives spent the summer clamoring for a vote to allow offshore oil drilling along the protected Atlantic and Pacific coasts. Even though the Department of Energy determined that drilling in the Outer Continental Shelf “would not have a significant impact on domestic crude oil and natural gas production or prices before 2030,” conservatives were relentless in their pursuit of a drilling vote. They even hung around humid Washington during the August recess to conduct pretend House sessions in an attempt to keep the drilling buzz alive.

After all of this caterwauling, they are about to get their wish. Later this month, Speaker Pelosi will bring up the Comprehensive American Energy Security and Consumer Protection Act. This bill would open up both coasts to oil drilling, speed the transformation to clean renewable energy and efficiency, and reduce energy costs for families. Interestingly, despite their relentless “drill, baby, drill” campaign, House conservatives indicate that they will oppose this energy bill that includes their wish—offshore drilling. They refuse to accept “yes” for an answer.

The comprehensive energy plan is a compromise that would protect some coastal areas while allowing drilling in other places for the first time in nearly 30 years. The bill would continue to prohibit drilling for up to 50 miles offshore, where routine and catastrophic oil spills could cause the most damage. States have the option to allow drilling between 50 and 100 miles offshore. All areas 100 miles offshore or more are open to drilling regardless of state wishes, except for marine sanctuaries. This compromise is a significant expansion of offshore drilling, although the entire coast in the lower 48 states contains only one of every five barrels of offshore oil. The rest are in areas long open to drilling.

Despite this huge expansion of drilling, many of the House advocates of “drill, baby, drill” are likely to vote against this bill. There are several potential explanations for rejecting their wish after it was granted. First, they may want to continue to protect big oil companies’ record profits, which have skyrocketed due to record oil and gasoline prices—$236 for every U.S. driver over the past year. The new bill would end big oil company tax breaks that create incentives to drill for more oil—hardly necessary when oil is $100 per barrel. In fact, President George W. Bush said in 2005 “I will tell you with $55 oil we don’t need incentives to oil and gas companies to explore.”

In addition, the new bill would recover $15 billion in royalties avoided by big oil companies that were owed for the production of oil and gas from the Gulf of Mexico in waters that belong to all Americans. In addition, it would dramatically reform the royalty collection system that enabled big oil companies to lower their payments in exchange for gifts, trips, booze and drugs, and sexual trysts with federal watch dogs.

Closing tax loopholes and collecting royalties owed the taxpayers would produce billions of dollars of revenue. The new House bill would invest these resources in clean renewable energy and efficiency. This includes a renewal of tax incentives for wind, solar, and other renewable energy sources, and efficiency measures due to expire on December 31, 2008. The bill would also establish new incentives to purchase super efficient plug-in hybrid electric vehicles.

The bill would also create a “renewable electricity standard” that requires utilities to produce 15 percent of their power from wind, solar, geothermal, biomass or other renewable sources by 2020. Twenty-nine states already have such a program. It could save families up to $18 billion due to lower electric bills. It would also increase funding for the Low Income Home Energy Assistance Program to help families cope with this winter’s higher heating prices.

These clean renewable and efficiency measures would reduce energy bills for families. They would also create tens of thousands of new manufacturing, construction, and other jobs. They would reduce the use of dirty, expensive, often foreign produced fossil fuels, and speed the transformation to clean, cheaper, homegrown fuels. Despite these benefits, many of the House leaders of the “drill, baby, drill” campaign have repeatedly voted against such clean energy measures. That may explain their opposition to this comprehensive bill.

The offshore drilling provisions of this (or any) bill would not produce any oil or gas for 10 years. In the meantime, the forthcoming bill would increase oil supplies in several ways. First, it would sell about 10 percent of the government oil stockpile, which is 98 percent full. This oil will be replaced later. When both President Bushes did this before, prices quickly dropped because the oil was on the market in two weeks. An overwhelming majority of the House voted for this as a free standing proposal, but House conservative blocked it. Opponents of the oil reserves release raised three times more campaign money from big oil than its supporters.

Instead of supporting the Comprehensive American Energy Security and Consumer Protection Act, House advocates of "drill, baby, drill" and other conservatives will likely support an alternative proposal. It will probably allow drilling within three miles of beaches, and include “incentives” for renewable energy that are little more than window dressing. The drilling expansion is mandatory while the clean energy incentives are small and voluntary. This is all part of their strategy that leaked two months ago.

Working families are desperate to survive with $4 per gallon gasoline—the result of eight years of Bush-Cheney big oil policies. Conservative leaders realized that they could score political points by perpetuating the hoax that the expansion of drilling into protected areas could reduce energy prices today, tomorrow, or five years from now.

As kingmaker of the right Rush Limbaugh put it, “We finally have, ladies and gentlemen, an issue that can rally people, a simple issue that’s easy to understand. Drill here. Drill now. Pay less. Folks, this is the issue.”

Perhaps House conservatives are reluctant to abandon this winning strategy even to support expanded drilling because they would rather have an issue than comprehensive energy reforms that would lower energy costs, create jobs, and reduce pollution. If so, this is more outrageous than the recently revealed “sex, drugs, and oil” scandal.

Daniel J. Weiss is a senior fellow and director of climate strategy at the Center for American Progress Action Fund.

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Daniel J. Weiss

Senior Fellow