Obama faces pressure on offshore drilling

December 2nd, 2008 · No Comments

By: Erika Lovley

If Barack Obama maintains the lift on the federal moratorium on offshore drilling, he may be able to forge early peace with the oil industry by potentially opening up more domestic production while using a series of procedural checks and balances to keep amity with the environmentalists.

The president-elect is already facing pressure from both sides on his plans for offshore drilling. And his actions could largely set the tone on this issue early in his administration, when a comprehensive energy bill is expected to be debated.

Bracing for a tough year, the American Petroleum Institute already kicked off a major public education campaign to keep up the pro-drilling momentum spurred by high energy prices over the summer, touting offshore drilling as a job-creating booster for the U.S. economy.

And as part of an environmental white paper already dispatched to Obama’s transition team, a coalition of nearly 30 green groups included reinstating the drilling ban that President George W. Bush lifted this summer.

But by reinstating the drilling ban, Obama could risk alienating the oil industry and potentially angering a large bloc of voters who supported him, since exit polls showed that a majority of Obama voters supported a compromise on offshore drilling.

Rather than issue an executive order, experts expect Obama to ask the new secretary of the interior to perform a routine environmental impact study on offshore drilling. And that would likely halt all drilling-related activity for longer than a year, while the study is being completed.

And if the study findings signal an adverse environmental impact, they could offer Obama a reason to reinstate the presidential ban, experts say.

“Obama won’t come right out and put areas off-limits. He’ll do the study first and use that to put most of those areas out of reach again,” said Dan Holler, Senate relations deputy at the Heritage Foundation. “There’s not too much for the oil companies to be optimistic about.”

Obama could also allow his fellow Democrats in Congress to reinstate the congressional ban on drilling that expired in September. But House Majority Leader Steny H. Hoyer (D-Md.) has already indicated that Congress likely will not reinstate that ban.

According to Obama’s agenda, he plans to promote responsible domestic oil production as part of a comprehensive energy plan. And he clearly supports the idea that oil companies must use the land they are given or lose it.

But the details of that plan are still being hashed out.

“We are taking Obama at his word,” said Dan Naatz, a lobbyist for the Independent Petroleum Association of America. “We hope it’s not empty political rhetoric. We fully anticipate a vigorous debate and hope it doesn’t fast-forward to just putting [areas] off-limits again.”

Energy lobbyists say they expect Democrats to also employ a roundabout approach to the congressional moratorium.

The ban has traditionally been renewed every year as part of the Interior Department appropriations bill, but experts say the issue will now be tackled much earlier, through a series of stand-alone bills or a major comprehensive energy bill that puts coastal restrictions around key drilling areas, which could be as far as 50 miles from shore.

Lobbyists expect a major bill from Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.). And the House Committee on Natural Resources is preparing a series of hearings on drilling policy beginning in February.

“We are concerned ‘drill, baby, drill’ could make a comeback,” said Athan Manuel, director of the Sierra Club’s lands protection program. “But we’re confident those kinds of moves will show the ecological values outweigh a short-term supply of oil.”

Another key panel to watch is the House Appropriations Committee, where the battle over renewing the congressional moratorium has traditionally been fought.

But greens and petroleum interests are most intently eyeing Obama’s shortlist for secretary of the interior.

The Interior Department’s Mineral Management Service handles offshore drilling, and the new secretary will help Obama determine whether scheduled lease sales should continue under the Bush administration’s current five-year plan, including sales in the western and central parts of the Gulf of Mexico.

The new secretary — Rep. Raul M. Grijalva (D-Ariz.) is a leading candidate — will also help determine whether the new administration considers a new five-year plan the administration is drafting that includes land freed when the moratorium expired.

“We hope the president will let the new five-year plan be developed and let the regulatory agencies move it forward,” Naatz said.

But even if the results of the environmental impact study give the green light to offshore exploration, oil industry experts say they would still face myriad roadblocks.

To win a lease, an oil company must first be approved through the Interior Department. Then a series of seismic tests must be performed to locate resources. The moratorium has made seismic testing off-limits for oil companies, so there is little data suggesting how much oil is available, Naatz said.

“There could be a lot of dry holes. It’s not 100 percent,” he said. “But that’s the nature of the business. There are huge challenges and risks, and very expensive wells.”

And more often than not, leases are delayed by lawsuits filed by environmentalists.

“A lot of people think that once the moratoria are lifted, oil companies can go out and do whatever they want. That’s just not the case,” said Lisa Flavin, senior policy adviser at the American Petroleum Institute. “There are tons of permits and regulations. It’s a very lengthy process.”


Copyright © 2008 Capitol News Company, LLC | Distributed by Noofangle Media

Tags: Lobbyists

0 responses so far ↓

  • There are no comments yet...Kick things off by filling out the form below.

Leave a Comment






Copyright © 2008 Capitol News Company, LLC | Distributed by Noofangle Media