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Jared Bernstein Headshot

The Not-So-Great Energy Debate

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To drill or not to drill -- that is the question. More precisely, that's the question that has set the terms of the debate on whether to lift the ban on oil exploration in the Outer Continental Shelf (OCS) and ANWR. It's also exactly the question the oil companies and their political proxies want us to debate. The fact that those of us who'd like to protect the ban have accommodated them is extremely unfortunate because it's the wrong question.

You see, big oil et al are not really the "drill" team; it's just a land grab, orchestrated while they still have friends in very high places. And it won't do a damn thing to the price of gas at the pump, certainly not in your aged granny's lifetime, and probably not in yours either.

If the oil companies wanted to drill for new oil, they could easily do so right now on the millions of acres of land currently available to them for leasing. As Joseph Romm, editor of the Climate Progress blog pointed out to me, there are thought to be 34 billion barrels of undiscovered oil under lands currently open to drilling, multiple times the amount that might be under the OCS or ANWR.

While big oil demonstrably has no pressing urge to drill, they very much want to lock down access to more leasable lands. What with those crazy leaders running around Russia and South America nationalizing the energy sector, and crazier environmentalists running around this country supporting bans and moratoria, the share of land in which American Big Oil Inc can poke holes is shrinking. And they'd like to close the deal before Bush/Cheney leave the building.

Isn't this just rhetoric? Even if they really plan to take their time about it, if at some point down the road they try to find more oil, what's wrong with the "drill" mantra? And why should those of us on the other side of the debate stress the "lease" point?

Because our only hope of turning this debate around, and it's a thin reed, is to convince the public that lifting the moratorium today would not affect prices at the pump tomorrow (or probably ever, according the EIA--see the blog link above). We can't get them to change their rhetoric from "drill, drill, drill," as Larry Kudlow regales me with regularly, to "lease, lease, lease." But we want to do everything we can to educate the public such that when big oil says "drill," we all hear "lease."

The reason this is so critical is because our only hope of winning this debate may lie in helping people to unconnect the dots between lifting the moratorium and the price of gas. Yes, it's hard to convince folks that drilling today won't lower prices tomorrow. But how about NOT drilling today? Because that's what we're talking about here.

The stakes are very high. Sources on Capitol Hill tell me that the only thing holding the line on the bans right now is Pelosi's ability to block the vote. With the R's pressing this as their sole issue, and the majority of the public solidly in the "lift the ban" camp, she may not be able to control this one, and sources tell me if it comes to a vote, the ban is toast, certainly on the OCS and maybe ANWR too.

If that does occur, our best move may be to go for something like the "gang of 10" compromise. That's a bipartisan group of 10 Senators who propose a limited expansion of OCS leasing with a quid pro quo that both repeals a big tax break from big oil and makes them finally pay royalties they've been avoiding for drilling on public lands.

I'd go further and also hit 'em with a windfall profits tax. ExxonMobil alone cleared almost $12 billion in profits last quarter. Just because they, their lobbyists, and their political puppet troop have bamboozled the public into believing that they'll be spared from $4 a gallon gas, we're supposed to hand them the keys to the OCS and ANWR? If that's where this is headed, then I'd like to see some pretty juicy quids for any quos.

Things could change if the price falls back this month while the Congress is back in their districts, but the more likely scenario is that these pols get an earful about energy prices and come back insisting on a vote.

At that point, the only thing protecting the ban is the spine of the Democrats. Most of them have been holding the line, bless 'em, but the line will break unless public sentiment changes enough to create a lot more support for the keeping the ban intact.

Perhaps there's a rich philanthropist somewhere who cares enough about the planet to sink some serious bucks into a massive information campaign to convince the public that A) these guys don't really want to drill, they just want the leases, and B) even if they did, drilling won't bring down the price today, tomorrow, next week, or next year. Maybe next decade by a few cents...maybe not.

I know. You're thinking: silly man, you still think facts matter. Guilty as charged. I can't help it. And there's got to be a more of us? Right? Hello? Anyone out there...?

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