Offshore Drilling Bans - Coastal Areas at Risk

reposted from Bloomberg.com

Bush Will Urge End to Offshore Oil Drilling Ban (Update3)

By Holly Rosenkrantz and Roger Runningen

June 18 (Bloomberg) -- President George W. Bush today will urge Congress to lift the ban on offshore oil drilling, a move that is in line with a similar call from Republican presidential candidate John McCain.

``With gasoline now over $4 a gallon,'' Bush ``wants to work with states to determine where offshore drilling should occur,'' and have ``the federal government to share revenues with the states,'' White House spokeswoman Dana Perino said yesterday.

Democrats have long opposed Republican efforts to end the ban on offshore drilling that has existed in some areas since 1981. Expanded offshore exploration also has faced opposition in the coastal state of Florida, which will be a battleground in the presidential campaign between McCain and Democrat Barack Obama.

``I don't see how either house of Congress passes this,'' said Pete Davis, president of Davis Capital Investment in Washington. ``This has been a long-standing issue and the lines are very hardened.''

Still, rising oil prices are creating a drag on the U.S. economy and energy costs have become a top political issue.

Bush ``is under a lot of pressure to show that he can still be effective on an issue that matters to voters, so this is one they've pulled out of the closet,'' Davis said.

Arizona Senator McCain, 71, the presumptive Republican presidential nominee, yesterday called for letting states open up more territory to offshore oil drilling, even as he promised a break from the energy policies of the Bush administration.

Obama Disagrees

Obama, 46, an Illinois senator who the presumptive Democratic nominee, said there is no evidence that lifting the ban on oil drilling would provide relief to consumers.

``This is not something that is going to give relief now, and it's not a long-term solution,'' Obama said yesterday.

Bush's push for offshore oil drilling is a one of several steps he wants Congress to take to boost the U.S. energy supply, Perino said. Bush, 61, wants Congress to open Alaska's Arctic National Wildlife Refuge to oil drilling as well. McCain opposes drilling in the refuge.

Perino said Bush will make his statement at 10:35 a.m. at the White House. The statement will include no presidential directives, she said.

The proposal may touch off a political firestorm between energy companies and environmental groups, between members of Congress from coastal states such as New Jersey, Florida, Virginia or California, and draw a contrast between Republican governors.

Crist, Schwarzenegger

Florida Governor Charlie Crist joined Bush and McCain in seeking an end to the ban. Crist reversed his longstanding opposition to drilling off the shores of his state hours after McCain made his call and administration officials said Bush will ask Congress to allow ``environmentally friendly'' drilling, the Wall Street Journal reported.

Crist had opposed offshore drilling on concern it would damage Florida's beaches and drive away tourists. ``We must be pragmatic in protecting both our beaches and our economy,'' Crist said in a written response to the newspaper.

A telephone call to Thomas Philpot, a spokesman for Crist, wasn't immediately returned.

In California, Governor Arnold Schwarzenegger opposes lifting the moratorium but ``still absolutely supports'' McCain, said Aaron McLear, a spokesman for the Republican governor, the Los Angeles Times reported. ``They're going to disagree from time to time, and this is one of those cases.''

Reserve Estimates

The nation's Outer Continental Shelf, including areas in the Gulf of Mexico that are already being drilled, has an estimated 86 billion barrels of oil and 420 trillion cubic feet of gas, according to the U.S. Minerals Management Service. Of that, almost 18 billion barrels* of oil and more than 76 trillion cubic feet of gas are off states where drilling isn't allowed, agency spokesman David Smith said.

Estimates for offshore areas where drilling is prohibited are likely low because there has been no exploration since the 1970s, Smith said. Advances in deepwater drilling in the Gulf of Mexico revealed deposits that increased reserves in areas that are open to drilling, he said

The U.S. had proved oil reserves of 29.4 billion barrels at the end of 2007, according to an estimate by BP Plc.

Republicans in the House plan to use Bush's remarks to prod the Appropriations Committee to ease energy restrictions as the panel considers a $27.9 billion spending bill for the Interior Department and Environmental Protection Agency.

Oil Shale

With oil prices up about double what they were a year ago and up about 40 percent this year, Republicans want to focus on domestic energy production, including removal of the current offshore drilling moratorium.** They also may offer amendments to permit the Interior Department to lease land in some western states for oil-shale extraction and open the refuge in Alaska for to drilling.

Oil futures in New York have surged fourfold since the end of 2003, including a 40 percent jump this year, and touched a record this week at $139.89 a barrel.

Crude's rise pushed gasoline and diesel prices above $4 a gallon in the U.S., dragging down profits for businesses ranging from shipping services to department stores and contributing to a drop in truck sales by Ford Motor Co. and other manufacturers. Record jet-fuel prices forced U.S. Airways and other carriers to cut more than 10,000 jobs and ground more than 400 aircraft.

To contact the reporter on this story: Holly Rosenkrantz in Washington at hrosenkrantz@bloomberg.netRoger Runningen in Washington at rrunningen@bloomberg.net

Last Updated: June 18, 2008 10:24 EDT

* Blog author's note: A 2004 estimate placed US daily oil consumption at 20.73 million barrels per day (https://www.cia.gov/library/publications/the-world-factbook/print/us.html). Based on that estimate, the 18 billion barrels that are estimated to be in water where offshore drilling is permitted, would last the US for approximately two years. The effects of offshore drilling on the environment would last for way, way longer than that. So basically, once again, the president wants to take actions w/long term consequences for a short term benefit.
**BA's note: this apparently does not include putting further $$ towards research of alternative energy sources: wind, solar, etc. Biofuel is another short term solution, but even it has shorter term effects on the environment than offshore drilling.