THE VINE MARCH 31, 2010
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The big news today is that Obama's reportedly planning to open up a bunch of new offshore areas to oil and gas exploration for the first time:
Under the plan, the coastline from New Jersey northward would remain closed to all oil and gas activity. So would the Pacific Coast, from Mexico to the Canadian border.
The environmentally sensitive Bristol Bay in southwestern Alaska would be protected and no drilling would be allowed under the plan, officials said. But large tracts in the Chukchi Sea and Beaufort Sea in the Arctic Ocean north of Alaska — nearly 130 million acres — would be eligible for exploration and drilling after extensive studies.
Back in 2008—during peak "drill baby drill" season—Congress let the federal moratorium on offshore drilling expire. Now this move pushes drilling slightly closer to reality. So what's Obama thinking here? One possibility is that he's looking ahead to the climate-bill debate in the Senate. A number of conservative Democrats and even some Republicans like Lisa Murkowski have said that new drilling has to be a key part of any big energy legislation that tackles carbon emissions. (A separate bloc of coastal Democrats, meanwhile, has warned that drilling would be a dealbreaker for them.)
Still, it seems bizarre to fork over this bargaining chip before the bill is even released. What kind of negotiating tactic is that? Especially since this move is going to infuriate environmentalists—the folks you want pushing for your climate bill. Note that the administration did the same thing with nuclear power, another item that could lure swing senators. Back in January, the White House proposed a massive expansion of the nuclear loan guarantee program without getting anything tangible in return from pro-nuke Republicans. John McCain still wanders around complaining that the administration's not "serious" about nukes. Now, maybe that's the point—offer an olive branch and watch Republicans swat it down and look unreasonable. Right on cue, John Boehner's already whining about Obama's drilling plan. Not sure that strategy makes sense, though.
Another possibility, meanwhile, is that this move isn't focused on the climate-bill debate and is geared more toward public opinion. According to the EIA, gas prices are expected to go up quite a bit this summer (probably shooting north of $3/gallon), and the administration may want to step out ahead of the inevitable teeth-gnashing and garment-rending over the issue. So this could be more about the midterms than rounding up votes in the Senate. Though, granted, this drilling announcement won't affect summer gas prices in the slightest.
And that leads to the separate question of how much oil will ever come out of these areas. After all, it's not like companies can just start drilling tomorrow. As The New York Times reports: "In many of the newly opened areas, drilling would begin only after the completion of geologic studies, environmental impact statements, court challenges and public lease sales. Much of the oil and gas may not be recoverable at current prices and may be prohibitively expensive even if oil prices spike as they did in the summer of 2008."
8 comments
Yes, this is concerning, for people like me who reside on the southeast coast (not so much, I suppose, for those in Patterson, NJ). But it's absolutely perfect politics all the way around. Not only does it take away a potent political weapon for the Republicans to use against the Administration, but it also provides cover for the Democrats in Congress this summer and fall during the campaign (heard any protests from Congress?). The Republicans learned long ago that you have to feed the crazies a little red meat from time to time. Just don't let them out of their cages.
- raylward
March 31, 2010 at 1:06pm
Maybe the president believes it's the right thing to do. There's not all that much oil to be had here, and it can't be gotten anytime soon, but those very facts also suggest that drilling will not be an environmental apocalypse. So the president performs a bit of judo where, by piercing the left's smaller bluff on drilling, he destroys the right's much bigger bluff on the same. Meanwhile, he satisfies the public desire for offshore drilling while protecting most of the ecosystems people most care about protecting. He also satisfies the largest possible pool of pro-drilling NIMBYs; what are New York and New Jersey going to do, vote for Palin because they're mad at Obama about the environment?
- rhubarbs
March 31, 2010 at 1:20pm
"Right on cue, John Boehner's already whining about Obama's drilling plan." I think if Obama asked Congress to draft a resolution praising John Boehner, John Boehner would say that this outrageous attempt to praise the leader of the caucus that was put in the minority by the last two Congressional elections shows that the White House is once again (but in an unprecedented way) defying the will of the American voters.
- frippo
March 31, 2010 at 5:43pm
based on what Brazil has achieved with deepwater, far offshore drilling, this announcement makes sense, with many political benefits accruing now, just as some speculation is filtering back into the futures market. rhubarbs: New York City would drill in the harbor if there was enough money to be made, and New Jersey's refineries would be glad of the new supply so close to home. Most likely the geology is not so promising from New Jersey north, or Wall Streeters do not want their Hamptons views spoiled. (sorry, this is cynical Wednesday for me, but was reminded of NYC's attempt to secede from the Union because so much money was being made from the cotton trade)
- K2K
March 31, 2010 at 8:01pm
frippo... LOL@ your John Boehner quip. Priceless.
- wkwami
April 1, 2010 at 6:47pm
Since the US has gone from 30% imported oil to over 60% imported oil in since Energy Independence was made a political goal, clearly more needs to be done than change energy policies every 2 years. Energy projects take years to develop and bring on line, so waiting until there is overwhelming need is not an intelligent policy; one has to plan ahead to have in 2020 the energy supply required then. Waiting until 2019 to decide we need to act is way too late. As a long time member of the Sierra Club I am very disappointed in their attitude of nothing but renewables. Their obstructionist tactics to hydrocarbon energy development is as short-sighted as the Republicans obstructionist tactics on health insurance reform, and as a Republican I am disappointed in their irresponsibilty on that issue. Neither organization addresses the real needs of the American people, for health care and insurance or for energy consumption. Even in the rosiest scenario renewables and conservation cannot provide over 20% of the country's energy needs so continued use of hydrocarbons is required, and continued exploration and development is necessary to meet those requirements. Wishing for solar energy to fulfill all our needs before the current hydrocarbon sources and projects expire will not make it happen. New exploration and development of oil and gas supplies is required and I support doing it close to home rather than sending all our national wealth to the Middle Eastern countries that are not our true friends.
- jgmusgrove
April 2, 2010 at 11:16am
A large chunk of the Beaufort Sea is disputed. Depending on where the explorations are to take place, drafting the terms of reference of arbitration to settle the territorial boundary issues alone could take a year or two, plus another two years for the arbitration.
- icarusr
April 4, 2010 at 9:41am
It's perfect because it appears that drilling is only going to be permitted in "red states", in areas that will require great expense to drill and transport, etc etc. But it will show opponents that "yes, we've explored every option and in addition to the focus on renewable/green technology, we have backed drilling". But let's look at the other item that states that Europe could get almost entirely renewable by 2050 without nuclear energy but upgrading their grid and joining with Africa. Surely the US has sun (desserts), water (falls), wind (lots of places) that really should be pushed hard.
- ericad
April 5, 2010 at 11:25am