Daily Archives: July 15, 2008

Bush One, Dems Zero

President Bush announced Monday that he was rescinding the Executive Order banning new off shore oil drilling that his father, George H. W. Bush implemented during his term in office. That does not mean however, that oil companies can begin exploration and drilling operations immediately. Congress passed a similar ban in 1981 and has renewed it every September 30, since then. Until the Congressional ban is either lifted or allowed to expire, there will be no change in the status quo.

This move by President Bush puts the socialist/democrats in Congress in an untenable position politically. They will have to either lift the Congressional ban immediately or face a showdown with the White House only a month before election. Congress cannot renew the ban this September without a Bush signature or an override of a Bush veto. According to Article I, Section 7 of the Constitution,

“Every order, resolution, or vote to which the concurrence of the Senate and House of Representatives may be necessary (except on a question of adjournment) shall be presented to the President of the United States; and before the same shall take effect, shall be approved by him, or being disapproved by him, shall be repassed by two-thirds of the Senate and House of Representatives, according to the rules and limitations prescribed in the case of a bill.”

President Bush offered, a couple of weeks ago, to lift the executive ban simultaneous with the lifting of the Congressional ban. Had the Democratic leadership taken him up on the offer neither side would have had a political advantage. Instead, the Democrats, under pressure from their environmentalist constituents decided to play “hard-ball” and refused to compromise. Monday Bush announced he would not wait any longer for Congress to accept his offer and instead would take the initiative by lifting the executive ban immediately, placing the next move in the hands of Congress.

In his announcement on lifting the ban, President Bush said:

“It’s been almost a month since I urged Congress to act, and they’ve done nothing, they’ve not moved any legislation. And as the Democratically-controlled Congress has sat idle, [gasoline] prices have continued to increase.”

“Failure to act is unacceptable. It’s unacceptable to me and it’s unacceptable to the American people. So today, I’ve issued a memorandum to lift the executive prohibition on oil exploration in the OCS. With this action, the executive branch’s restrictions on this exploration have been cleared away. Now the ball is squarely in Congress’s court.”

Needless to say, the Congressional leadership on the Democratic side are not happy campers. House Speaker Nancy Pelosi was among the first to condemn the announcement.

“The Bush plan is a hoax. It will neither reduce [gasoline] prices nor increase energy independence. It just gives millions more acres to the same companies that are sitting on nearly 68 million acres of public lands and coastal acres,” she said.

The “68 million acres” talking point has become familiar over the last few weeks. This objection sounds plausible to many Americans because most do not know how oil leases work. The government makes leases on government controlled lands available to oil companies for exploration and possible drilling for a period of ten years. If the company does not develop the lease during that time, it reverts back to the government.

These leases are sold to the oil companies at auction with the price often running into the billions of dollars. While there is a geological probability there is oil underneath the lease, there is no guarantee by the government. In practice, only about 80% of the leases prove to be economically viable for commercial oil production. Most of the leases that Pelosi says the oil companies are “sitting on” have already been explored and found to be unviable either because the cost of extracting the oil would make it unprofitable or there is not enough recoverable oil to make it worthwhile.

Sen. Dianne Feinstein (D-Calif.) said that Bush’s move was “a false promise on which he can’t deliver. The fact is this: The president is deluding the public into believing that new offshore drilling is a quick fix to $4/gal gasoline. Nothing could be further from the truth. We cannot drill our way out of this problem.”

While Senator Feinstein’s assertion that “we cannot drill our way out of this problem” may prove to be true, it is certainly true that doing nothing will not solve the problem. However, even the Democrats believe that increasing the supply of oil available on the market will bring down the price of gasoline. This is indicated by the Democrat’s calling for President Bush to release oil from the strategic oil reserves.

Representative Rahm Emanuel (D-IL), the chairman of the House Democratic Caucus called President Bush’s action “a political stunt.”

“If the president wants to lower gas prices, he should stop hosting press conferences and start taking action,” Emanuel said. “Releasing oil from the Strategic Petroleum Reserve and forcing oil companies to drill on the 68 million acres they already control would be a good place to start.”

Many Democrats have echoed Emanuel and Pelosi’s call to release oil from the strategic oil reserves. None, however, has indicated what options we would have if we emptied the strategic reserves, failed to expand domestic production and OPEC decided to impose another embargo as they did in the 1970s. The Strategic Oil Reserves was established by law as a hedge against just such an interruption in our oil supply. With things as they are in the Middle East, it would be foolhardy to tap the reserves when we have an abundance of oil readily available if Congress would allow us to get it.

Another favorite excuse of the Democrats for not lifting the ban is the claim that it would take seven to ten years for the new wells to begin producing. On the same day Bush announced the rescinding of the Executive ban, BP announced it will spend $1.5B recovering oil from the Liberty oil field off the north coast of Alaska not covered by drilling bans. BP plans to be in production in early 2011, less than three years from now.

Perhaps the oil crisis is summed up best by Rep. John E. Peterson (R-Pa.),

“Make no mistake: The price at the pump and sky-high natural gas prices are the result of 27 years of failed Washington policies. The politics of fear, implored by 14 consecutive Congresses and three presidents at the behest of radical environmental groups like Greenpeace, Sierra Club, and the Center for Biological Diversity are the reasons Americans are paying record prices for energy,” he declared.

There is more than enough blame to go around for our oil dilemma as it now stands. However, if we continue to do nothing about increasing our domestic production the fault has to fall squarely on the obstructionism of the Democratic Party and their socialist allies.

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