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Why the Candidates Dodge Offshore Drilling

 

Barron's Online  
Monday, May 12, 2008
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D.C. CURRENT  

Why the Candidates Dodge Offshore Drilling

By JIM MCTAGUE

OUR THREE PRESIDENTIAL CANDIDATES SHARE THIS PECULIAR infirmity: None of them has any backbone. If they did, then instead of blaming Big Oil for soaring energy prices, they would stand up to some real culprits responsible for the run-up. These are politically powerful coastal states like Florida, New Jersey and California, which time after time have placed their parochial interests ahead of the nation’s critical need for energy independence by prohibiting the offshore production of natural gas and oil.

Of course, oil companies have no electoral votes. And wealthy Californians, some of whom own property overlooking the oil-rich Santa Barbara Channel, are never slow to underwrite the costs of presidential campaigns. This might explain why in June 2007 all three presidential candidates were conveniently absent from the Senate when a vote came up on Virginia Sen. John Warner’s proposal to allow drilling off the Virginia coast. It was roundly opposed by colleagues from New Jersey, Florida and California, on the nose-under-the-tent theory.

There are an estimated 86 billion barrels of oil and 420 trillion cubic feet of natural gas under the Outer Continental Shelf that technically is recoverable. The government says 54% of that energy is in the Gulf of Mexico and 31% is off Alaska. Florida alone, according to a 30-year-old energy survey, has an estimated 22 trillion cubic feet of natural gas and 3.88 billion barrels of oil within 125 miles of its Gulf coastline. There’s probably more, but Florida officials won’t countenance a probing of the seabed within 125 miles of the state’s coastline, citing environmental concerns.

The fact is, drillers have an enviable safety record and arguably have done less damage to mother earth than have the construction and tourist industries on shore. The last significant spill from an oil rig in this country was off Santa Barbara in 1969, yet California has banned further drilling. Most major spills are a result of ship wrecks, yet no one proposes prohibiting seagoing vessels from sailing near shore.

“If the other 49 states realized what Florida is doing to them, they’d be up in arms,” grumbles Al Hubbard, an Indianapolis businessman who until recently had been President George Bush’s economic adviser. Hubbard thinks the nation is crazy not to be tapping these supplies, especially when oil is trending toward $150 per barrel. “Why not keep the money here instead of sending it to the Middle East?” he asks.


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Republican Rep. John Peterson of Titusville, Pa., where the first oil well was drilled nearly 150 years ago, has tried tirelessly to lift the moratoriums on drilling off the East and West Coasts and the Florida Gulf Coast, and he will do so in coming weeks when Congress considers an appropriations measure for the Interior Department. His action largely will be symbolic, because of lack of support in the Senate and from the White House. For all his tough talk on energy independence, when it comes to standing up to these states the president also is without backbone. He favors limited drilling, as long as state and local leaders agree.

PETERSON LAST YEAR INTRODUCED A BILL that would open up the Outer Continental Shelf to natural-gas drilling. That seemed like a reasonable idea, since there has never been a rig-related natural-gas environmental calamity, and the U.S. is paying the highest natural gas prices in the world. Just selling leases, Peterson says, would bring prices down immediately.

But President Bush doesn’t support revoking lease-sales moratoriums first imposed by his father in the 1990s and later extended to 2012 by Bill Clinton. “President Bush has made it clear that he will give great weight to the desires of states that do not want new oil and gas development off their coasts…,” an energy department official wrote Peterson last December.

Bush, during the 2000 presidential contest, promised his brother Jeb, Florida’s governor at the time, that he’d maintain the drilling ban. It just so happened, we recall, that Florida and the U.S. Supreme Court gave him the election.

Barack Obama and Hillary Clinton want a windfall-profits tax on Big Oil. John McCain promises no more tax breaks for the oil men. These are feel-good proposals that fail to respond to the supply-demand imbalance that are driving up prices faster than our economy can fully digest them.

Some experts now see oil hitting $200. At that level, the economy would stagger. Florida’s tourist trade would be devastated. New Jersey’s taxes would soar ever higher. The public would scream for succor. Perhaps then one of our candidates would grow a backbone.

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