Welcome to "The Watchdog," which will keep a close eye on regulatory agencies and how their actions impact the lives of everyday Americans. Though the rules and regulations they write -- from determining how much arsenic is allowable in your drinking water to whether your favorite TV show can drop the F-bomb in primetime -- affect all of us, their deliberations and the way that lobbyists influence their decisions receive very little coverage. To make sense of these debates, follow the implementation of health care and financial reform and decipher the minutia of the Federal Register, "The Watchdog" is on the case. If you have any tips, send them to firstname.lastname@example.org.
05/18/2011 1:48 PM EDT
The Wake-Up Call: FBI Takes 2 Years To Indict Its Own Fraudster
• FBI takes two years to indict one of its own agents, who was facilitating mortgage fraud.
• EPA releases utilities' plans to make coal ash storage safer.
• Connecting the dots on energy market manipulation: Recently the Federal Energy Regulatory Commission issued two orders in two different cases; one found manipulation of natural gas markets, and the other failed to find evidence of it in connection with the purchase and sale of electric energy.
• Emergency rooms across the country have closed at an alarming rate over the past 20 years, particularly those serving lots of poor patients, says a new report in the Journal of the American Medical Association. (h/t fairwarning.org)
05/18/2011 1:32 PM EDT
Gas Pump Politics Is A Bipartisan Game
"Because it was the height of the political season, you had all kinds of slogans, and gimmicks, and outraged politicians -- they were waving their three-point plans for $2 per gallon gas. You remember that -- 'Drill, baby, drill'. ... There was a lot of hue and cry, a lot of fulminating and hang wringing but nothing actually happened. Imagine that in Washington.”
That was President Barack Obama two months ago giving a speech on energy policy, and getting a laugh out of the Georgetown University audience with a sarcastic remark about the histrionics of the 2008 campaign.
Indeed, the gas pump politics hasn’t matured over the last two years, but the president bears some responsibility for that.
With gas prices hovering above $4 per gallon -- double the price two years ago -- the Obama administration, Democrats and Republicans all seem to be playing politics. They're offering energy policies that make for dramatic headlines and juicy soundbites, but won’t have much of an impact on gas prices, say energy experts.
The Senate rejected a bill pushed by the administration and leading Democrats on Tuesday that would have saved $21 billion over ten years by repealing tax breaks for the five largest oil and gas companies. Such breaks don’t seem necessary in the face of the industry’s record profits, and a repeal wouldn’t have had much of an impact on gas prices -- despite Republican claims to the contrary.
Senate Minority Leader Mitch McConnell (R-Ky.) will introduce a bill on Wednesday that expands oil drilling and requires the Interior Department to decide on drilling permits within 60 days -- otherwise a permit will be deemed approved. The bill has been criticized by environmentalists for rolling back the limited post-Deepwater Horizon disaster reforms and derided by some Democrats. "That is like saying if a home buyer is not approved for financing within 60 days, they automatically get the financing regardless of their credit," fumed Sen. Bill Nelson (D-Fla).
In addition, McConnell's bill has drawn fire for a provision that could give oil companies an unfair advantage in lawsuits dealing with drilling in the Gulf of Mexico. It would make the federal appeals court in New Orleans the "exclusive venue" for such civil suits -- that court is considered sympathetic to the industry because many of its judges have financial holdings in energy companies.
In his radio address on Saturday, Obama responded to Republican and oil industry pressure by announcing major steps to accelerate oil and gas drilling. He essentially returned to the positions he adopted just a month before the catastrophic BP oil spill in the Gulf of Mexico last year. The plan involves speeding up reviews of the environmental impact of drilling off the South and mid-Atlantic coasts, extending oil company leases in the Gulf and Alaska and conducting annual lease sales in Alaska’s National Petroleum Reserve.
The return to a more "industry-friendly approach," noted the New York Times, comes on top of several bills passed by the Republican-led House that allow more drilling and stymie the efforts of drilling opponents to challenge plans that don’t meet environmental reviews.
Proponents of the bills have attempted to link Obama’s moratorium with rising gas prices -- yet that logic is flawed, say oil market experts who point out that prices at the pump are much more dependent on global trends. Even if every square mile of the outer continental shelf and the entire state of Alaska was opened to drilling, the impact on gas prices would be delayed for years and might cut the prices of gas by 3 to 4 cents a gallon, according to the federal Energy Information Agency.
The steps to increase drilling come amid intense industry pressure -- lobbyists have pigeonholed Congressional staffers in hallways and at home. "I had an oil lobbyist calling me during dinner one night and he wouldn't get off the phone," says one staffer.
In total, oil and gas companies spent $39.6 million on lobbying in the first three months of 2011, more than almost any other industry. In the 111th Congress (2009-2010), oil and gas companies spent about $440,000 a day on lobbying expenses and employed almost 800 lobbyists, more than one lobbyist per member of Congress, according to Taxpayers for Common Sense.
Though the administration insists that it has increased safety and environmental standards and the troubled agency with oversight of offshore drilling has been revamped in the wake of the spill, environmentalists are troubled by the apparent rush to drill.
"He's responding to political pressure,” says Richard Charter, senior policy adviser for marine programs at Defenders of Wildlife, who claimed that Obama’s announcement represents his fifth flip-flop on the issue. “During the campaign, he said he would protect the Florida coast from offshore drilling at any cost. The next day, he said some drilling would be OK. He took office and backed off the issue. Then last April, he said he would pursue drilling. Then he backed off after the Deepwater Horizon disaster. And now he’s back on it again.”
In addition, Charter notes that the administration exempted the 33 wells halted by last year’s moratorium from new, tougher environmental reviews. "They're basing decisions in these very sensitive areas on hysteria about gasoline prices."
Interior Secretary Ken Salazar and offshore drilling regulator Michael Bromwich appeared before the Senate Energy and Natural Resources Committee Tuesday to answer questions from impatient drilling proponents. Salazar pushed back against the desire among some lawmakers to shorten reviews of drilling plans to 30 days, noting that such shortened timetables allowed the troubled Minerals Management Service to hastily approve potentially dangerous rigs.
"The agency didn’t have the capacity, resources or the time to do the effective job it should be doing,” said Salazar. "We're talking about a 90-day timeframe and that seems reasonable."
Bromwich, who exuded the slightly impatient air of a professor trying to teach quantum physics to a class of kindergartners, was even more dismissive of the suggestion, which is a key part of one of the drilling bills that passed the House last week. "It’s a profoundly bad idea. ... They could submit a permit that they knew was deficient, didn’t meet all the enhanced safety requirements and then run out the clock and have their application approved."
When drilling supporter Sen. Mary Landrieu (D-La.) held up charts and fumed that over 100 oil exploration plans are pending, Salazar calmly explained that the number was far less -- about 36 deep-water plans in addition to some shallow-water plans are currently under review by his agency.
Bromwich later added that, "the fact is our people have absolutely no incentive to slow down the processing of permits. Most of our people who review and approve permits are residents of Louisiana, so it's their neighbors whose livelihoods are at stake."