Pres. Bush Lifts Executive Ban on Offshore Oil Drilling, Challenges Environmentally-minded Congress

July 15, 2008 in Building the Green Economy, Climate Destabilization, Quipu Economic Forum by Joseph Robertson

US pres. George W. Bush has lifted the executive ban on offshore oil drilling on the Outer Continental Shelf (OCS), and has challenged the US Congress to act to open the OCS to new oil exploration, saying the US needs to increase domestic production to reduce its dependence on imported oil. The ban was put in place by his father, George H.W. Bush, the 41st US president, for environmental concerns and in part because the oil companies have leases for huge expanses of underwater terrain they have not explored or exploited.

Critics say lifting the ban will have little to no effect, short or long-term on the price of crude oil or on gasoline at the pump, in part because the US is not part of the OPEC cartel that sets production rates and prices, and in part because it will take so long for any of the new production to come online. Opponents in Congress have said it is just a ploy to put political pressure on Democrats in an election year when gas prices are high.

Both presidential candidates have made a point to repeatedly state their intention to provide heavy increases in funding for the development of alternative energy sources. Sen. John McCain, however, has said he backs lifting the ban, and he has backed policy intervention to alter the price of gasoline, like lifting the federal gas tas temporarily. Sen. Obama has often talked of the need to tap America’s resources, but he supports maintaining the ban.

The truth of the matter at present is that there is no known way for offshore drilling to bring oil prices down to sustainable levels, as the projected rise in global demand far outstrips the expected production capacity of the US offshore reserves. As evidenced by oil tycoon T. Boone Pickens’ massive national campaign for wind-power, only by changing the structure of our national energy economy can we bring energy and transport-fuel prices back within reach of the average consumer.

As reported by The Hot Spring last week:

Special transparent dyes coating glass or plastic panes concentrate the Sun’s rays, guiding them to solar-voltaic cells lining the edges, allowing a window to act as a solar panel with 10 times the electricity generation capacity of solar cells, by current standards. The ‘organic solar concentrator’ (OSC) system also reduces cost, by reducing the surface area that needs to be coated by solar-voltaic cells and by eliminating the need for large concentrating mirrors and sun-tracking mechanisms.

In line with this information, and because climate scientists, US courts, international treaties, and American law, all suggest that we move toward a long-term ongoing decline in carbon emissions, the US Congress continues to oppose lifting the ban, which they would have to do with new legislation. According to the San Francisco Chronicle:

On the surface, President Bush’s decision Monday to lift the presidential moratorium on offshore drilling – a policy initiated by his father and extended by Bill Clinton – appeared only to embolden Democrats in their efforts to preserve the 27-year-old federal ban.

Congress has renewed its ban on drilling on the Pacific and Atlantic coasts every year since 1981, and top Democrats said Monday they will do so again this year, despite the pressure from Bush. House Speaker Nancy Pelosi called Bush’s action a hoax that “will neither reduce gas prices nor increase energy independence.”

Coming just days after the EPA announced it would not institute caps on carbon emissions this year, the executive action is likely to intensify political attacks related to the issue of energy production and oil prices. Pres. Bush has sought to blame Congressional Democrats’ opposition to drilling offshore and in the Arctic National Wildlife Refuge (ANWR) in Alaska for the recent upsurge in oil prices. Since that policy has not changed in nearly 3 decades, it is hard to see the immediate cause and effect.

If we look for geopolitical causes, we find ongoing chaos in Iraq, threats of a possible military action against Iran, Iran’s threat to close the Strait of Hormuz, interrupting potentially more than one-third of the world’s oil traffic, a rogue regime in Sudan and a surge in sabotage on Nigerian oil fields. On the economic front, we have the collpase of major financial institution in the US, the dollar now worth less than half its 2001 value against the euro, and the predicted approach of peak oil production.

Rep. Lois Capps (D-CA) wrote on the issue:

a report last year threw cold water on the idea of new offshore drilling as the way to lower gas prices. It said that new offshore drilling “would not have a significant impact on domestic crude oil and natural gas production or prices before 2030″ and that the impact on prices would be “insignificant.”

Pres. Bush’s own Energy Information Administration issued that report. Rep. Capps went on to note that “the oil and gas industry is sitting on 68 million acres of public lands where it could be drilling but isn’t. It has some 6,000 leases in the Gulf of Mexico (where the majority of oil and natural gas reserves are found) that are not being explored.”

The argument that oil and natural gas firms would gladly lower prices if only they were given access to drillable reserves does not hold up, if we consider that they are not doing this now, though they can. So the summer will likely see a heated contest for public support between Congressional conservationists and the Bush White House, with Senators McCain and Obama squaring off as spokespeople for the competing points of view, but something other than future drilling will have to be done to lower prices at the pump.