Obama's Anti-Drilling Agenda
President Obamaís oil spill commission will release its long-awaited final report this morning, recommending new government regulations and limits on drilling. These conclusions could shape the future of the oil industry -- and impact our nationís energy policy for years to come.
The commissionís primary focus was determining the cause of the spill. Last week it revealed that errors by BP, Transocean and Halliburton contributed to the blowout of the Macondo well, resulting in the deaths of 11 people and the worst spill in history.
But the commissionís members have decided to go a step further. The anti-drilling measures recommended in their report would take America in the wrong direction. This shouldnít come as a surprise. Obama picked five members who lack expertise in drilling and have a history of donating to Democrats. One member leads the Natural Resources Defense Council.
Expect liberals to seize on the report to condemn the industry as a whole and renew their attacks on offshore drilling. But the fact is that mistakes of individual actors should not result in punishment for an entire industry.
The American people deserve better. With energy needs on the rise -- and gas prices inching higher -- now is a time for solutions. The first step is putting an end to the Obama administrationís anti-drilling policy in the Gulf of Mexico. Just two new deep-water permits have been issued since the politically motivated moratorium ended three months ago. Thatís down 88 percent from the historical average. Shallow-water permits, which werenít even subjected to the moratorium, are down 11 percent.
Ongoing delays in the Gulf of Mexico are only part of the problem, however. Offshore drilling bans currently prevent exploration in about 85% of our coastal waters. Those bans are crippling job creation and making America more reliant on foreign sources of oil.
Unfortunately, they were recently reinforced by the Obama administration. The Interior Department announced last month that the eastern Gulf of Mexico and the Atlantic and Pacific coasts would be off limits for the next seven years. That news came after the administration canceled four pending lease sales in Alaska.
The oil industry has much to contribute to Americaís energy needs -- particularly in light of rising gas prices. The American Petroleum Institute, in its "State of American Energy" report, estimated the industry supports more than $1 trillion in annual contributions to the U.S. economy. Creating additional access to areas currently closed to development would lead to even more domestic production, new jobs and billions in government revenue.
Yet the administration's actions are having the opposite effect: The lack of exploration and production means fewer jobs for out-of-work Americans and less money flowing into federal coffers.
For the first time since 1959, the United States could go an entire year without a lease sale. That means the loss of more than $1 billion in bonus bids, less revenue from rental payments and significantly fewer royalties. State governments, already grappling with fiscal problems of their own, could forfeit upwards of $100 million in tax revenue, according to Louisiana State University finance professor and economist Joseph Mason.
In addition to its anti-drilling recommendations, the commission will also suggest reforms to the offshore oil and gas liability regime. In the wake of the spill, The Heritage Foundation proposed a liability and claims process that assigns risk of offshore oil and gas operations, compensates victims and protects companies from frivolous lawsuits.
With renewed attention on energy issues, now is the time for Congress to abandon policies and regulations rooted in Washington that lead to higher gas prices, energy shortages and job losses. Instead, lawmakers should turn their attention to common-sense solutions that focus on the free market and entrepreneurial spirit of the private sector.