Laurie Wheelock

September 22, 2008

Since 1982, Congress has repeatedly voted to extend the moratorium against offshore drilling in the Outer Continental Shelf. However, this year's deadline of September 30th will likely mark the moratorium's end. On Tuesday, the Comprehensive American Energy Security and Consumer Protection Act was introduced and passed in the House of Representatives by a vote of 236--189. The act--touted by Democrats as a major compromise--allows drilling to begin 50 miles from the shoreline for both the Atlantic and Pacific coasts with state approval. No state approval is necessary 100 miles from the shoreline.

While Democrats view passage of the act as a major step away from the nation's dependency on foreign oil, the timing of the act's introduction and its specific provisions angered a majority of Republicans. Some House Republicans accused Speaker Nancy Pelosi and the Democratic Party of playing political games by introducing the act to appease voters before the presidential election. Others declared the act was useless, since states are not allotted any share in the royalties paid by oil companies to drill offshore, leaving no incentive for state approval. There are also reports that the distance requirement will be counterintuitive because a majority of the oil is located within the 50 miles of protected area from the shoreline. Since drilling will not be allowed there, Republicans worry that oil companies will find the distance restrictions uneconomical and decide not to pursue drilling.

Democrats responded to contentions by stressing that the act represents great steps towards America's energy independence. Besides ending the moratorium on offshore drilling, the act also proposes to lift bans on developing fuel from oil shale in the Rocky Mountains along with renewing tax credits for renewable energy in both the wind and solar industries. Tax incentives for solar energy projects were extended for eight years while credits for wind power were only extended for one additional year. Both industries consider these tax incentives the most important government based assistance.

The Senate is now expected to take up the issue but a resolution is not expected before the presidential election in November. Washington insiders are speculating that the Senate will likely re-work the act or possibly adopt a bill with different provisions from those included in the Comprehensive American Energy Security and Consumer Protection Act.

Sources:

Carl Hulse, House Adopts Plan to Ease Offshore Drilling Ban, The New York Times September 16, 2008 available at http://www.nytimes.com/2008/09/17/washington/17cong.html?_r=2&hp&oref=slogin&oref=slogin (last visited Sept. 18, 2008).

House Approves Offshore Drilling Bill, Environmental News Service September 17, 2008 available at http://www.ens-newswire.com/ens/sep2008/2008-09-17-092.asp (last visited Sept. 18, 2008).

Kent Garber, In Easing Offshore Drilling Ban, House Also Expands Energy Exploration Offshore, U.S. News & World Report September 17, 2008 available at

http://www.usnews.com/articles/news/politics/2008/09/17/in-easing-offshore-drilling-ban-house-also-expands-energy-exploration-onshore.html (last visited Sept. 18, 2008).

US Lawmakers Vote to End Twenty Six Year Ban on Offshore Drilling, AFP September 17, 2008 available at http://afp.google.com/article/ALeqM5iCxqRiQ2NIx5kw2eJ8CMB7MGXBFg (last visited Sept. 18, 2008).