Congressional morons that keep the price of oil high
House Votes to Keep Offshore Oil Drilling BanDon't you just love Congressional politics? Nothing is ever passed anymore as a separate bill. And the most pernicious measures inserted into massive bills tend to be simple, yet so effective in damning the American people.
WASHINGTON — The House of Representatives is not lifting a quarter-century congressional ban on offshore oil drilling in coastal waters outside the western Gulf of Mexico amid arguments that new supplies are needed to lower energy prices.
A proposal to end the long-standing moratorium as it applies only to pumping natural gas was expected to be voted on later Thursday as lawmakers moved toward late-night approval of a $25.9 billion Interior Department spending bill.
The proposal to allow oil drilling in waters off both coasts and in the eastern Gulf of Mexico — areas off limits to energy companies since 1981 — was rejected by a 279-141 vote. It had been offered by Rep. Ted Poe, a Texas Republican, who called the drilling ban "an outdated policy" when the country needs to reduce its dependence on energy imports.
Separately, the House passed by a 252-165 vote a measure that would bar oil companies who fail to renegotiate contacts that allow for federal royalty relief no matter how much oil costs in the marketplace from future oil or gas leases.
The measure was aimed at correcting a mistake made by the Interior Department in the 1990s that failed to put an oil price cutoff for royalty relief. The mistake could cost the Interior Department as much as $7 billion in lost royalty revenues. While the measure does not order these contracts renegotiated, it would put pressure on companies to do so, its supporters said.
"Energy companies have been taking oil and gas from the American people for free and then selling it back to them at record prices," said Rep. Maurice Hinchey, a Democrat who sponsored the amendment.
Supporters of the drilling ban, renewed by Congress each year since 1981, scrambled to try to restore the natural gas drilling ban which had been stripped from the Interior spending bill in committee.
Republican Rep. John Peterson argued that developing the offshore gas resources would pose none of the environmental risks — mainly the prospects of a spill — associated with oil drilling. Supporters of the ban argued that natural gas and oil drilling were too closely linked.
Lifting the moratorium for the first time in 25 years would allow energy development within three miles of shore along coastal areas "where tens of millions of our citizens have made it clear that they don't want any more drilling," said Rep. Lois Capps of California, which has extensive offshore deposits but strict bans on exploitation.
Capps planned to offer an amendment to continue the natural gas drilling prohibition.
Florida lawmakers — both Democrats and Republicans — said energy development off the state would threaten a multibillion dollar tourist industry. Florida depends on tourism "and we're going to protect it," vowed Rep. Alcee Hastings, a Florida Democrat.
Opponents of the drilling prohibition argued that access to offshore oil — and especially natural gas — would drive down energy prices and help reduce the country's dependence on foreign sources of energy.
"We have lost millions of jobs already because of high energy costs, and we're going to lose millions more," said Peterson, who has tried unsuccessfully for two years to lift the offshore moratorium as it applies to developing natural gas.
Soaring natural gas prices, which have quadrupled since 1999, have forced companies — especially in the chemical and fertilizer industries — to consider moving overseas where fuel prices are much cheaper, he said.
Peterson's measure would lift the congressional ban which prohibits the Interior Department from offering gas leases in waters along both coasts and in the eastern Gulf of Mexico. It would not affect a presidential ban on drilling, issued by executive order, that is in effect until 2012.
Drilling proponents also faced an uphill struggle to get the moratorium lifted in the Senate, where senators from coastal states probably could block any such action.
President George W. Bush has said he has no plans to remove the drilling ban.
But Capps said if Congress lifts its moratorium and declares that coastal waters should be opened to drilling, she fears the president "is going to revoke his moratoria" as well.
The offshore drilling issue has divided Congress largely along geographic lines.
Lawmakers from coastal states —both Republicans and Democrats — worried that drilling offshore could threaten their tourist and fishing industries and bring risks of environmental damage.
"People don't go to visit the coasts of Florida or the coast of California to watch oil wells," said Rep. Sam Farr, another California Democrat.
Whether in ANWR or off-shore fields, merely allowing drilling will help drive down oil prices immediately. Capps needs to take a microeconomics class or two. Prices are not just a reflection of the present, but of expectations of future supplies too. When buyers on the global petroleum market are uncertain of Iranian and Nigerian output, and when they expect China and India's appetite for oil to grow, they're willing to pay more. When they know that the supply, especially domestic supply under stable U.S. control, will be higher for years to come, they won't be as willing to pay. As I've explained before, we won't see $40 per barrel crude right away, but buyers will have greater confidence in reliable supplies.
Back into the limelight steps Maurice Hinchey, the conspiracy theory nutcase who claimed on Sean Hannity's radio show that Karl Rove leaked the "Bush memos" to CBS. (After a year and some months, he has yet to offer one shred of proof.) In accusing the oil companies of making too much profit, Hinchey ignores the reality that our friend Josh Hendrickson pointed out last month: other industries normally have far higher profit margins. And I ask, who was crying for the oil companies during the 1990s when oil and gasoline prices were quite cheap?
Hinchey's crime is even worse: is he really as stupid as he sounds, that he laments the federal government losing $7 billion in royalties, when the oil companies would invariably pass that cost on to consumers? He also omits the fact that states and the federal government collect far more in gasoline taxes than oil companies make in profit. I wish I could remember now who recently noted that with all the taxes collected over the years, the federal government could buy every American today a brand-new Prius. How's that for putting things in perspective? And don't forget the double-taxation, because governments also get a cut of oil companies' profits.
Certain lawmakers are so concerned about tourism, but higher oil prices (at the pump and also the rippling effect) cost Americans far more than the tourism industry would gain. "Protect" is the proper word, all right, because Hastings and Farr are engaging in nothing short of protectionism. "To hell with you, and to hell with the idea that I should have to compete. I'm going to use the power of government to benefit my livelihood and make you bear the cost."
Did they ever consider who can still visit Florida or coastal California when high gasoline prices force families to cut back on leisure? What of families taking vacations closer to home, because it now costs considerably more to drive somewhere, or because airline tickets have gone up from higher fuel costs? And what of the working poor, who Democrats supposedly champion? Instead of actually doing something to bring down the price of gasoline, all the Democrats are doing is protecting the vistas, which are enjoyed more by the well-to-do. Just who are liberals really fighting for?
And three miles is really quite a distance. To put something else in perspective, I work about a mile north of the Empire State Building. At triple that distance, even the largest oil rig will hardly mar the sea's horizon. I personally would prefer the oil rigs out there, knowing that someone's helping to keep my fuel costs down (and strictly for his own self-interest).
Humberto Fontova recently noted in Human Events that there tends to be more aquatic life, especially fish, around the artificial reefs of oil rigs. His excellent piece addresses the issue of oil rigs' environmental impact. "The environmental dangers of oil exploration and extraction rank right up with the marvels of Cuba's healthcare as modern man's most zealously cherished fables." In 50 years, we've never had a major spill from rigs, only tankers, and "More birds get fried by landing on power lines and smashed to pulp against picture windows in one week than perished from three decades of oil spills." It's well worth reading the whole thing.