Wednesday, September 24, 2008

Nancy Pelosiís

Itís not even clear itís a good political strategy. Pelosiís bill is an obvious charade.


How lame is the energy bill that Speaker Nancy Pelosi had her House Democrats pass through the House on Tuesday? Louisiana Sen. Mary Landrieu said before the vote that Pelosi's handiwork would be "dead on arrival" in the Senate. This from a Democrat who's up for re-election in an oil-and-gas state that would seem to gain from the bill's much-ballyhooed expansion of offshore drilling?

What gives? For starters, Landrieu knows that the limited drilling the House leadership allows in principle—it opens up waters 50 miles from shore with state approval—is made next to impossible in practice. How? By not allowing states to share in the revenues. Why would they agree to oil rigs off their shores when there's nothing in it for them?

Why would Pelosi and company pass a bill that really doesn't increase domestic oil production? Don't they realize Americans favor greater reliance on our own resources and want long-term relief from high gasoline and natural gas prices? Yes. Which is why they put together an energy bill with a drilling component and scheduled a vote. They were getting hammered for not even allowing a vote on the House GOP's energy bill. It's also why the House Democrats' "drilling" provision is, as Landrieu understands, a sham. The Pelosi bill does not constitute an energy strategy to bring down prices over the long term. It's a political strategy to give the illusion of action.

"Democrats appear to be aiming to bring their bill up for a vote in order to say they've held a vote on drilling," Congressional Quarterly reported.

Mere speculation? A conclusion based on the chasm between what the Pelosi package promises and what it delivers? Hardly. A House Democratic leadership aide told the quarterly that "members are concerned that they are getting beat up on the issue ... and want to be 'armed to hit back.'"

The bill's sham drilling provisions are clear when set against the House Republicans' drilling provisions. Unlike the Pelosi bill, the GOP's comprehensive energy alternative—comprehensive in that 40 percent of royalties from the new oil leases (an estimated $1.2 trillion) would go to renewable research and development, environmental cleanup, carbon sequestration and nuclear waste recycling—allows development of the 2.5 million barrels of oil per day in domestic shale oil resources. The Pelosi bill requires that states "opt-in" and does not allow communities to share in the revenues. Again, there's no incentive for states to allow shale-oil development.

Unlike the Pelosi bill, the GOP alternative provides a real lifting—not a faux lifting—of the current ban on offshore drilling. It not only includes financial revenue-sharing incentives for states that approve coastal drilling, but also opens up a far larger area where drilling can take place. The Pelosi bill limits all oil and gas drilling to 50 miles. The GOP alternative allows states to decide if they want drilling from 25 to 50 miles offshore—where most of the oil and gas is located. On the Pacific Coast this cuts off more than 97 percent of our Pacific oil and natural gas reserves.

The Pelosi bill "allows" drilling from 50 to 100 miles out if states "opt in." Without revenue sharing for the states, however, this won't happen. The GOP alternative gives states that decide to allow offshore drilling 30 percent of the revenues.

In practice, the Pelosi bill fences off outer-continental shelf oil and gas production within 100 miles of our shoreline. Right now, Congress' annual ban puts 85 percent of the outer-continental shelf off-limits. This is an area with up to 86 billion barrels of oil and 420 trillion cubic feet of gas. The Pelosi bill keeps 88 percent of this resource-rich area (the 85 percent of the outer-continental now under lock and key) off-limits for good. This is an energy policy?

It's not even clear it's a good political strategy. Pelosi's bill is an obvious charade. Recall Landrieu's dead-on-arrival warning. Then there's this: The offshore drilling ban must be renewed each year. Thus, if Congress does not pass another ban—or something in its place—by Oct. 1, the whole drilling ban is no more. They'll be no distinctions between 25, 50, 100 or 200 miles offshore or putting 40 percent of the royalties into conservation and renewable energy. Then, Pelosi will have conspired through a mix of intrigue and ineptness to produce an energy policy that will rightly be called "Drill, baby, drill."

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