Santa Barbara Congressmember Lois Capps attacked efforts to lift the moratorium on new federal oil leases off the United States’ coast with all the gusto of a sugar-hungry six-year-old going after a birthday party pi±ata. Capps, who represents one of the most oil-adverse districts in the United States, ridiculed the idea-which was put forward this past week by President George Bush and the presumptive Presidential nominee of the Republican Party John McCain-that the acute pump pain now being experienced by American gasoline consumers can be addressed by lifting the Congressional moratorium on new offshore oil leasing in federal waters off the coast. “This is a dodge, a smokescreen,” Capps said, “to keep our eyes off what we should be focusing on to really address the problem.” By that, Capps said, Congress and the federal government should be promoting conservation and alternative energy sources, including solar, wind, and biomass-derived fuels.
Capps noted that even if the outer continental shelf contained as much oil as industry analysts and government agencies suggest-18 billion barrels-it would take at least ten years for any of that to come into production. And given the intense worldwide demand for oil, Capps predicted, the new supplies would have at most a negligible effect on gas prices. To think otherwise, she said, “is just crazy-making.”
The oil industry, Capps contended, has been driving up the price of oil through a combination of speculative trading schemes and by withholding massive offshore lease holds from production that oil companies have held for many years. According to federal records, various oil companies have secured 68,000 acres of offshore property that they’re not currently drilling or producing. “They’re just sitting on them,” charged Capps. “They like these high prices.” Industry officials dispute that, noting that it typically takes many years to secure the necessary permits to drill and produce after acquiring the leasing rights. None of those 68,000 acres, however, lie off of Santa Barbara’s coast. There are 37 undeveloped offshore leases, however, but they are presently the subject of litigation filed by environmental organizations. It’s estimated that those leases could produce as much as 580 million barrels of oil, less than a month’s supply for the United States, according to Linda Krop, chief counsel for the Environmental Defense Center, which represents these suing groups.
There are, in fact, not one but two oil leasing moratoriums in place. The first one is congressional, and was passed in 1981 in response to Santa Barbara’s cataclysmic 1969 oil spill. Legally, the congressional moratorium must be renewed annually. That approval typically is included as part of the Department of Interior’s annual Appropriations bill.
The second moratorium is presidential, having first been enacted by the previous President George Bush in 1991. That moratorium has since been re-affirmed by Bill Clinton. Without approval by the next president, the presidential moratorium is scheduled to expire in 2012. Barack Obama has opposed lifting the moratorium.
Capps said this year’s assault on the oil moratorium is nothing new for the current President Bush. Every year for the past eight years, Capps said, various Republicans-with Bush’s backing-have sought to overturn the congressional moratorium on new offshore leases. Two years ago, Californian Republican Congressmember Richard Pombo came the closest to actually overturning the moratorium. Working with a solid Republican majority, Pombo succeeded in having the moratorium language deleted from the Interior Appropriations package. But even though Republicans enjoyed a House majority, Capps and a bi-partisan coalition of other coastal state representatives managed to get the moratorium language re-inserted. Key to the success of that effort was the participation of key Republicans from Florida. But this year, several Florida Republicans have cited the economic pain inflicted by the rapidly rising cost of gas as motivation for their second thoughts. Chief among them is Florida Governor Charlie Crist, often included on the short list of politicians considered as a running mate by McCain. In the past, Crist has supported the moratorium. Capps suggested that this political motivation might be behind Christ’s recent change of heart. “If you have your eye on being vice president, that’s what you have to say, if you’re governor of Florida,” Capps said. What’s different now, she added, is not just the $75 it cost to fill one’s tank with gas, but that, come January, the oil industry will lose a White House uncommonly sympathetic to the oil industry’s interests. In that context, Capps said the latest effort to overturn the moratorium should be seen “as the industry’s last ditch effort to get one over on the American people.”
Although McCain - who is scheduled to attend a fund raiser in Santa Barbara on Monday - is now opposing the moratorium, he has, in fact, supported it in the past. In addition, he remains opposed to oil development in Alaskan environmentally sensitive wilderness reserve. McCain spokespeople have acknowledged that opening up America’s offshore tracts to new leasing will not deliver any immediate relief from high gas prices. But they have insisted that the policy reversal will send a powerful message to the global energy market that the United States is serious about reducing its dependence on foreign oil. The U.S. currently consumes roughly one-quarter of the world’s oil supply, and only a small fraction is produced within the 50 states. McCain, in his address to oil executives earlier this week, argued that individual states should be allowed to opt out of the existing moratorium. As an inducement, states should be given a slice of the royalties. For some cash-strapped states, this could prove irresistible. Capps and other critics of this plan argue that oil spills and air pollution do not respect state boundaries and that individual states should not be allowed the option of lifting the moratorium.
Capps acknowledged that the high gas prices have cost the oil leasing moratorium political support. In fact, if the moratorium came up for congressional renewal today, she said, “I’m not sure how the vote would go.” Both of California’s senators, Barbara Boxer and Diane Feinstein, strongly support it. So does House Speaker Nancy Pelosi, who represents the Bay area. And so does Republican Governor Arnold Schwarzenegger, who has endorsed McCain for President. But Capps conceded that some of the Republicans who have endorsed the moratorium in the past no longer do so, and even the Terminator can’t bring them back. Part of the Democratic strategy is delay. Rather than subject the moratorium to something as risky as an actual vote, the Democrats have decided to keep it alive via a parliamentary maneuver known as the “continuing resolution.” Typically, these are deployed to keep the government financially afloat during times of budgetary impasse. Republicans, sensing their advantage, can be expected to clamor for a vote, but as members of the minority party, won’t be in a position to force one.
The other part of the Democratic strategy - at least in the House - has been to go after the oil industry and its record profits. The House has passed two bills designed to eliminate tax breaks currently enjoyed by the oil industry worth roughly $16 billion, redeploying them to producers of alternative energies. While these measures passed the House by substantial margins, they’re could not override a certain presidential veto, and the Senate has been less than enthusiastic, as well. In the days and weeks to come, Capps said “use-it-or-loose-it” legislation would be forthcoming, meaning that oil companies that have sat on leased offshore lands for 10 years without taking meaningful steps to develop them will either be forced to sell them back to the federal government or surrender them due to lack of performance. In addition, she said a bill would be introduced to bring energy speculators under the same regulatory control as other commodities. Eight years ago, the Republicans passed a measure exempting oil traders from this oversight in what’s known as “The Enron Loophole.”
But even if Bush, McCain, and the Republicans were to prevail, Krop said it would be a light year of Sundays before any new lease sales translated into actual production off the California Coast. The Coastal Commission and the State Lands Commission would both have something to say about it. And every step of the way would be subject to the full panoply of environmental review. “In terms of gas prices, it wouldn’t make any difference at all,” Krop said. “And it would be a very long process getting there.”