Politics & Policy

Drill, Obama, Drill

It’s not that we’re opposed to Barack Obama’s executive order allowing some limited oil exploration on the Outer Continental Shelf. It’s just that we’re a little . . . suspicious.

A brief history of this issue: In 2008, with oil prices topping $140 a barrel, President Bush lifted an executive order banning offshore drilling. A federal law banning drilling remained. Republicans, in the minority in both chambers, fought a bitter battle with congressional Democrats to let the congressional ban expire. In part because of Republican pressure, and in part because 70 percent of the public favored drilling, the Democrats caved. The stage was set for a new era in American oil exploration.

But the financial crisis popped the oil bubble, and a Democrat was elected to the White House. With Americans paying less at the pump, and therefore paying less attention to oil policy, Obama was able quietly to reinstate the executive ban. But he now proposes to liberalize those restrictions, allowing some exploration in the Atlantic and in the Gulf of Mexico. In exchange for what?

Obama’s energy policies until now have had one unifying theme: artificially higher prices for fossil fuels. After reinstating the executive ban on drilling, Obama proceeded to back an energy bill in the House, the centerpiece of which was a cap-and-trade program that would have put an artificial ceiling on fossil-fuel emissions. “Under my plan of a cap-and-trade system,” Obama told the San Francisco Chronicle, “electricity rates would necessarily skyrocket.” His EPA administrator issued an endangerment finding clearing the way for the agency to restrict the use of fossil fuels independent of congressional action, which it intends to do. His secretary of the interior canceled a number of oil-shale leases cleared by the Bush administration, blocking development of this potentially plentiful source of petroleum. The president himself flew to an international climate summit in Copenhagen — after initially saying he would skip the trip — in order to lobby for a last-minute accord on global emissions caps.

And when he hasn’t been working to make fossil fuels more expensive, he has been making it rain taxpayer dollars on renewable-energy companies in the hopes of seeing something green — if not green energy, then at least a little extra green for 2010: Democrats have raked in 80 percent of the money going to the biggest recipients of green-industry campaign contributions.

Given this track record, forgive us for suspecting that this latest announcement is about something other than lowering the price Americans pay at the pump. The aforementioned energy bill is stranded in the Senate. It appears to be the last piece of Obama’s transformational agenda that he seeks to enact before the people speak in November. If Congress doesn’t act now, the president appears to realize, then it will be more difficult to secure its cooperation after the fall.

The limited drilling is clearly being offered as a bargaining chip, a way to give soft Republicans such as Sen. Lindsey Graham (R., S.C.) and oil-state Democrats such as Mary Landrieu (D., La.) cover in exchange for their votes on legislation that caps or taxes emissions. Graham and Landrieu were members of the Gang of Ten, the senators who proposed limited drilling in exchange for lots of new subsidies for green-energy companies and, in the process, nearly derailed the effort that undid the congressional ban. Unsurprisingly, the Obama’s drilling proposal looks a lot like the one the Gang of Ten put on the table. No drilling would be allowed in the oil-rich Pacific or in Alaska’s Bristol Bay. A relatively tiny sliver of the Gulf of Mexico would be opened up, along with parts of the Atlantic coastline and the north coast of Alaska. We argued at the time that the amount of oil that the Gang’s proposal might yield wouldn’t be worth the cost to taxpayers of even more subsidies for politically influential but commerically lame green industries. It certainly wouldn’t be worth it now that carbon caps have been added to the broader policy mix. 

The president’s proposal is acceptable — as it stands. But it is not robust enough to be counted as an acceptable tradeoff for the kind of destructive energy rationing that has been a hallmark of his energy agenda thus far. If it is a prelude to carbon caps of the kind Obama has advocated, or to unilateral energy regulation by Obama’s EPA, then our suspicions will have been confirmed.

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