Decades old offshore drilling ban almost certain to expire

Despite heated wrangling in Congress, oil and gas drilling three miles from shore will likely become legal

By Lawrence Lanahan

This week, while Congress was bailing out a drowning Wall Street, the debate on offshore drilling moved a whole lot closer to shore.

As oil and gasoline prices have surged over the past year, Congress has been battling over the best way to reduce the country’s dependence on foreign oil. The buzzword in this Washington debate is “all-of-the-above,” an attempt to reconcile two opposing camps: those who wish to reduce our consumption of petroleum through fuel efficiency and renewable energy, and those who prefer to increase domestic production by opening up restricted areas—such as the Arctic National Wildlife Refuge and the Atlantic and Pacific coasts—for oil and gas exploration. Drilling on the Outer Continental Shelf (OCS) outside the western Gulf of Mexico used to be out of the question. Congress has maintained a moratorium since the early 1980s, and Presidents George H.W. Bush and Bill Clinton mandated their own bans. But President George W. Bush rescinded the executive ban in July of this year, and the Congressional moratorium is slated to expire on October 1.

Without a Congressional renewal, the Department of Interior can move forward with drilling leases up to three miles from the coast. On Wednesday, September 24, the House passed a continuing resolution without the drilling language. If it passes in the Senate and the president signs it, the expiration of the Congressional moratorium is all but ensured.

Environmentalists and Democrats had long supported the drilling moratorium. According to McClatchy Newspapers, presidential candidate Barack Obama stated his support of the moratorium as recently as June 20.

In June, however, gas prices hit $4 a gallon and public support for offshore drilling rose to 67 percent. The Energy Information Administration projects that drilling on banned areas of the OCS wouldn’t have a “significant impact” on production or prices for 22 years, but polls speak louder than government projections. And Congress was listening.

In August, a bipartisan Senate “Gang of 10” announced a plan to allow states to opt in to drilling up to 50 miles from shore and share in the revenue. The New Energy Reform Act would also extend renewable energy tax credits and put $20 billion into a twenty-year plan to get American cars off fossil fuels.

The House drafted a similar bill. However, it didn’t allow states to share revenue, and the GOP ridiculed it for leaving states no incentive to participate. The GOP also objected to the 50-mile rule, citing Department of Interior data showing 88 percent of oil in the currently banned areas is within 50 miles.  

Some environmental groups objected to the compromise. “These types of policies keep us anchored to Big Oil, mired down in the energy policies of the past,” says Kate Smolski, senior legislative coordinator for Greenpeace. Others pledged their support. “If the House and Senate don’t act at all,” says Richard Charter, a government relations consultant for the Defenders of Wildlife Action Fund, “next Tuesday night, September 30, at midnight, 27 years of protection will lapse automatically.”

The House introduced its bill the evening of September 15 and brought it up for a vote very next day, enraging Republicans, whose drill-heavy American Energy Act had been stuck in committee since July 22. The House bill passed 236 to 189.

Just a couple of days later, Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke dropped a bomb, asking Congress to let them buy hundreds of billions of dollars worth of distressed mortgages, according to the New York Times. Senators Kent Conrad (D-ND) and Saxby Chambliss (R-GA) quickly announced that their bipartisan “gang” would withhold their legislation until after the election. “The massive financial meltdown was really sucking the air out of the room,” says Conrad spokesperson Chris Thorne.

With the House bill unlikely to see a Senate vote before September 30 and Congress itching to adjourn, Democrats turned to Plan B. Since the House hadn’t passed an appropriations bill to replace the one expiring September 30, they needed a continuing resolution to keep funding the government. Attaching the drilling language from the House bill to the resolution would force Bush’s hand: If it didn’t pass the Senate and get Bush’s signature, the government would shut down.

House Democrats floated a draft continuing resolution with the drilling language and began negotiations with the White House, but after just a day or so, House Appropriations Committee Chairman Dave Obey (D-WI) told reporters that the moratorium would be lifted.

“The White House,” Speaker Pelosi (D-CA) spokesperson Drew Hammill told reporters, “made it clear that any new drilling provision was a non-starter.”

Barring any new dramatic developments, the decades old ban will lapse next Tuesday at midnight.

From an environmental standpoint, this is obviously bad news, beyond simply extending our reliance on fossil fuels. Although a National Research Council (NRC) report says the amount of petroleum released during extraction is decreasing, spills still pose a significant risk. Once introduced to the ocean, oil can harm marine life, threaten ecosystems, and cause environmental and economic damage onshore.

“Not only in wake of a spill would it be catastrophic for the adjacent coastal economy,” says Daniel J. Weiss, a senior fellow at the Center for American Progress Action Fund. “Even when functioning well, an oil rig releases thousands of pounds of toxic chemicals into the water.” (These chemicals, notes Dr. James Coleman, chairman of the NRC report’s committee, are not very significant compared to runoff from the coast and other human contributions to ocean pollution.)

What’s scariest is what we don’t know. Oil in the Sea III, the NRC’s 2003 report, says that large spills have provided much of our knowledge, but little is known about the threat from “small, chronic releases of petroleum.” Much more research remains to be done, the report claims, on the effect of “pollution events” on populations and ecosystems.

Despite the impending expiration of the moratorium, don’t expect to see platforms popping up off the coast of Malibu or Myrtle Beach anytime soon. “Speaking hypothetically…it’s about eight years to get to that point,” says Nicholas Pardi, a spokesman for the Minerals Management Service, the Department of Interior agency charged with leasing tracts for oil exploration.

The Minerals Management Service already has one tract planned for exploration. The agency’s five-year plan stipulates that a “call for information” will be issued on a “special interest sale” off the Virginia shore if the moratorium is lifted. It won’t happen tomorrow, though. “That sale isn’t planned until 2011,” says Pardi. “Lots of work needs to get completed to get to that step.”

If the moratorium expires, Congress will likely take up legislation similar to the House or Senate bills after the election. A new president can sign a compromise bill or even reinstate the executive ban. Of course, a new president could also veto any drilling legislation, and if Congress doesn’t have enough votes next year to override that veto, it would leave things as they are—three miles offshore.