The Not-So-Great Energy Debate

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...?

Comments

[drewb0b]

What makes me angry is that noone who is talking about energy actually has the courage to recommend using Hemp to get us out of this situation. It has the power to make us completely energy independent in a single season and then provide us with nutritious food and long lasting organic textiles. It would create a multi billion dollar industry over night. I just wish one or two of these politicians would grow some cohones.

[long333]

It is funny how a billionaire like Soros could get rich on hemp but does nothing. He should invest all his money and he could make billions in return overnight like you said.

[Annette]

Takes more than 1 or two. Got to get enough politicians to pass a law.

[JiminNC]

One compromise solution may be to allow exploration with a) We will lease an area to you temorarily, then extend the lease AFTER you drill, find oil and continue to pump for one year minimum ... don't drill or keep pumping, the land reverts ... b) significant royalties on every barrel ... c) trust fund set up, paid by the barrel that has a felony attached if not paid quartery or any attempt is made by the government to raid it, only to be used for US environmental clean ups ... d) strict environmental regulations, mandates and access to inspectors.

... something like that

[LorettaSingbiel]

"One compromise solution may be to allow exploration with" ...

conditions ... compromises ... CONSTITUTION ... won't be worth the paper they're written on, if MCCAIN = BUSH sets foot in OUR White House.

There IS someone "who cares enough about the planet to sink some serious bucks into a massive information campaign to convince the public" ...

That person IS our next president ...

OBAMA '08!
HOPE & CHANGE!

[bbbear]

It could work! If only our bought and paid for politicians were not controlled by Big Money Lobby, and We The Sheeple not hypnotized by the corporate media....

[ahornick]

Add in criminal restrictions on exporting the oil and its products outside the US.

[TxAggie]

"Something like that" already exists- all the bases are covered. The MMS is one of the best run federal agencies. Leases are granted for fixed terms that expire unless production is found and it must be maintained in paying quanties or the leases expire.

As for "strict environmental regulations, mandate and access to inspectors". Do you actually think this doesn't already exist? The oil industry is one of the most regulated, supervised and best run industries in the US.

It's real nice of you to come up with theses great ideas but they have been evolving in the GOM since 1948 and any and everything a layman like youself might dream up has been covered. You might to go to the MMS website to learn a little about the subject.

[SamThornton]

Increasingly, the U.S. has to deal with state-run oil monopolies in its quest for energy. Dealing with these entities (OPEC, Venezuela, and Russia, for example) through the medium of private U.S. oil companies places us at a distinct disadvantage. We are one remove from real power to make deals.

If we are to be serious about maintaining some degree of leverage in our dealings with state-run oil monopolies, at some point we're going to have to face the necessity of either nationalizing our own oil assets or remaining at the mercy of both private and state-run monopolies.

U.S. energy resources are, for the most part, public resources which the government has given away to private businesses, one of the most egregious examples of socialism for the rich in our history. Nationalization of our oil industry would pay a fair market price for physical plants, less tax giveaways, amortization credits, and depletion allowances to the private oil industry. The energy resources themselves have always belonged to the public and should be placed back under public control.

[long333]

If we going to alternatives in 5 years why bother?

[dadw5boys]

Yeah lets go broke and end up not able to go to alternatives.

[mjt218]

Well aren't we going to have to abandon this planet when the sun burns out in a few billion years? Why waste our time on alternatives? Let's just spend everything on space travel.

I don't think it's a good argument to assume that we will have the benefit of alternatives in place in the near future. Most people 30 years ago, thought we'd be flying around in flying vehicles and eating pills for food like in the Jetsons in 2010. We need to take advantage of every energy source we have at our disposal.

[liberalloons]

It will take longer than five years. First they have to create it, test it, if it passes testing then they will have to try and completley replace the energy that we have been using for years; and that alone will take more than five years.

[stexas]

execuse me! My great grandparents Brought and paid for our lands and held on throught droughts, floods, mexican bandits, ect. and you say that minerals below these lands are public resources! Go back to Korea, Ven. , and Cuba if you want public nationalization of everything!

[joebhed]

Good idea.

[liberalloons]

When has nationalizing something ever been effective?

[buckeye487]

You have got to be kidding! State run? nationalized? Yeah, our Federal Govt can handle it.

When I think efficient, well run, fiscally responsible organizations, I think Federal Govt.

Think VA, Amtrak, Immigration, Fed bureaucracy in general. No thanks

[thepeoplechoose]

Jared, you should be looking at the tax implications of this for the oil companies. I suspect the leases, whether drilling commences the next day or not, have very advantageous tax implications for the oil companies. They get access to huge chunks of public space at rock bottom prices, get a huge write off by way of the lease cost and get a tax break on top of that.

I'm guessing this ends up as a net loss for taxpayers. In fact it has to be to maintain consistency with Bush energy policy.

[mosh]

This is the true issue, no doubt. Big Oil has been closing refineries for years, not expanding. They don't want to drill. This is both a ruse, to improve their public image and, as you say, as a tax. Embedded in these energy bills are often other give aways - like provisions that gut the clean air act by allowing other industries to ignore the act's provisions and keep polluting.

BIg Oil is not interested in drilling or building refineries it is interested in keeping profits high by deeping quantity low and demand high. Period.

[NicholeWebb]

Maximizing profits is the legal fiduciary responsibility of corporations.

[mouselion]

Good point.
HuffPo and other reporters: why not check the tax angle of tis and exactly what is the advantage to Oil?

[TxAggie]

Drilling cannot commence the next day, it takes years to develop a prospect, permit it and drill it. We do not acquire leases at rock bottom prices, we acquire them through competitive bidding and the gov't establishes the minimum value of a lease after we bid. Oil companies do not buy leases for the hell of it we buy them to drill and discover reserves. You want to tak about a net loss to taxpayers- there is a great opportunity loss for unleased acreage which is under moritoria, the loss is not lease bonus, no rentals, no royalty- nada. It would seem leasing millions of acres so oil companies could "lock up" acrage without drilling would be a greenies dream, lotsvof money, no drilling, perfect.

[army193]

So much for the baloney about “no new refineries­.” But what about the related argument about alleged barriers and permit delays for expansions of existing refineries? First, note that all the expansions mentioned above have taken place and are expected to continue without any change in current rules. Backing up that experience, CEOs for BP, Shell and Conoco all testified to Congress last year that environmental requirements have not blocked a single planned refinery expansion. And, contrary to Joe Barton’s wild assertion, then-EPA administrator Carol Browner testified to Congress in 2000 that about half the permit modifications for refineries were issued within five months and that most of the others were issued within a year. That conclusion was bolstered by a new survey by state air pollution regulators, which concluded that environmental requirements have not delayed refinery expansion plans.

[army193]

Is the profit before or after they buy back there stock?

[army193]

Just sent letter the my editor asking Doc Hastings to answer why not demand the oil companies to drill on the 68 million acres they have. Doc Hastings said there is estimated 31 billion barrels on federal lands 3 times more than the estimate in ANWR...But of course he did fail to mention the 68 million acres that oil companies have now. What to know why we don't demand that they drill or lose the leases and inform our electric here that the oil we do get goes on open market...D­oc Hastings want to blame Bill Clinton because the oil companies cant drill in ANWR... Republicans should be laughed out of congress on this one.

[long333]

You need to remind people that we have 33 billion barrels that dwarfs ANWR and we could have doubled domestic production the whole time if not for the oil companies.

[mjt218]

They do lose the leases if they cannot prove to their regulators, the Minerals Management Service (Department of the Interior) that they are taking all possible steps to develop any resources contained within.

http://www.mms.gov/5-year/FrequentlyAskedQuestions.htm (question Q)

Leases in Gulf of Mexico Deepwater hold a 10 year primary term.

[TxAggie]

Where is the oil?? If you know where it is you can make millions telling companies where to drill. It is amazing that in spite of all their technology and efforts oil companies can't find o& g but you know where it is . THAT IS GREAT NEWS!!!!!!

[AshevilleVoice]

Nice piece, Bernstein.

Consider this also: the cost of offshore drilling is much higher. The top 5 drilling companies- Transocean, Diamond Offshore Drilling, Noble, SeaDrill, and Ensco International- charge $500,000 to $550,000 a day to rent their rigs. This is expected to rise to $700,000 per day in a short 3 years. This charge does not include any environmental impact costs to contain toxic chemicals and spills.

Offshore drilling is absolutely guaranteed to increase prices at the pump.

And there is a finite amount of oil anyway. We might as well start development of renewable clean energy sources now. Screw the oil barons out of their last few trillion in oil profits.

[long333]

AshevilleVoice: Offshore drilling is absolutely guaranteed to increase prices at the pump.

I don't hear anyone talking about prices going up for offshore drilling.

You should be more vocal that the line about not being able to affect world markets.

Tell people "Isn't true in the case of offshore oil production it causes a premium to be added to world prices."

[LorettaSingbiel]

"This charge does not include any environmental impact costs to contain toxic chemicals and spills."

In a victory for CORPORATIONS seeking to limit big-dollar lawsuits, the Supreme Court decided to reduce the $2.5 billion punitive damages awarded as punishment for the company's role in spilling 11 million gallons of oil into the pristine fishing waters of Alaska's Prince William Sound. The award was excessive, the justices wrote.

BUT ... spending $2 BILLION per DAY to fight MCCAIN = BUSH's "Global War On Terrorism" in IRAQ is NOT "excessive"?

POLITICIZING the Justice Department ... PRICELESS!

[Bozwellian]

Worth noting and few spotlight it, the "timetable" whys/where­fores..to even START drilling they need equipment and presently, MAXED PRODUCTION and so without equipment NO DRILLING FOR A NUMBER OF YEARS and WHY is the public SO STUPID to think that drilling would start NOW and ALLEVIATE NOW the present costs ? Are we that fully dumbed down to where give us a placebo yak and we will JUST trust THEY will do the right thing regarding all this ? Have we learned absolutely NOTHING during these Bushlerized years ? It remains astounding that there is even a debate as to which candidate WOULD offer us the better alternative OPPORTUNITY when one of them is blatantly willing to stay the PRESENT couse and continue to roll down the same roads !!
Could certainly use some REAL straight talking expressing, seems too many still lumbering in slumber over critical issues that really DO effect/affect our greater common good !!!

[newworldman777]

From what I understand, we don't even have the extra deep-water rigs or drilling ships to increse the drilling on newly-opened deep-water territory. Additionally, we don't have the supply boats or the crews to service extra rigs. I worked on those boats for years, so I speak with first-hand experience. Even if we could get any extra oil (by some miracle), we don't have the refining facilities to process it. To get to a point that would make a difference with prices at the gas pump would require many years and billions of dollars (money that could otherwise be invested in alternative energy research).

We are now witnessing grandstanding by the Republicans (with their "revolt" on Capital Hill) regarding the drilling issue. They are shamefully politicizing it, trying to paint the Democrats as obstructionists who are preventing the increase of the production of domestic oil and consequently ensuring high gas prices. Sadly, many of the American people will undoubtedly fall for this dispicable ploy, possibly once again putting another Republican into the White House over this issue. Ignorance -- and the Republican exploitation of the ignorance of the American electorate -- always seems to dictate whom we ultimately end up with as our "leaders."

[torrrep]

Production produces something. Research produces nothing. If I had a choice to spend billions on producing something and producing nothing I would go with the producing something. What's so hard to understand about that?

[TxAggie]

How does offshore drilling raise increase prices at the pump? Let's see, increased production from the OCS casues prices to rise. Isn't that a reversal of supply and demand- increased supply causes incrreased price. So using that logic, if we cease drilling and supply, prices go down?

You might want to go back to the drawing board on that one.

Thanks for the insight on the daily cost of a deepwater rig, nice trivia but what does that have to do with anything?

[DMSmith]

This really is the one thing we need most to do. This lie about drilling gambit is working for McCain, and it's all he has. If we don't blow that one up and turn it around on him, he will come close enough for them to steal another election.

I mean this guys. It's that serious.

[flyingnomad]

So true!

[NTO08]

Obama has flipped on this...why­?

Is it to defuse McCain's position, which is what a majority of Americans want, wrongly, of course?
Or is it being the politician his former Reverend told us he was?

[joebhed]

Or, BOTH.

[newworldman777]

Let's face the fact that the American electorate is largely an ignorant lot, easily swayed by lies about domestic oil production (from the Mccain camp). If Obama doesn't favor the issue of icreased domestic oil production, along with McCain, the we will surely see this election go to McCain. How depressing is that? Blame the ignorance of the American electorate, along with the exploitation by the Republicans, for this fiasco.

[PuffDragon]

It's true: if the oil companies and our government HONESTLY thought that drilling would help, then WHY ISN'T BIG OIL DRILLING ON LAND THAT'S ALREADY AVAILABLE TO DRILL?

Because THEY KNOW THAT IT ISN'T THE REAL SOLUTION, and frankly, they don't want the price of oil to drop.

In the amount of time it takes to explore, drill, extract, we could be well on our way to solar and wind. Remember: YOU DON'T DRILL FOR SUNLIGHT OR WIND. We ALREADY KNOW where to find those sources of energy.

[tweed7t]

You sound like Naomi Klein. I have read her book. I am reading yours now.

I also saw you on CSPAN.

What did the headlines read in one of those British newspapers when George Bush won reelection? It read "how can 53 millioin Americans be so dum."

[FearlessFreep]

The best way to lower oil prices--and possibly the only way--is by rationing gasoline.

[CamJam]

I was just a kid but remember when they had the gas rationing back in 1973... and I remember how hard it was on my parents but I still did not quite understand it all.

Now I'm the parent and we're struggling to make ends meet. And with all I see (Majestic Mt Hood doesn't look as pretty as she used to) and with all that has gone on with this politically, my husband now rides his bike into work (a 10.5 mile ride one way and another 10.5 mile ride back)
Great! but we live in Portland, Oregon, and the cold long rainy season will be upon us soon.
If we had the extra few thousand and if the cars sold by Electric Wheels Inc sold out of Salem Oregon ran a bit faster and farther, we'd be able to say good bye to gas and the prices as well as the nightmare it has caused our country and our world.

[LorettaSingbiel]

"I was just a kid but remember when they had the gas rationing back in 1973"

In 1972, my first fill up for my first car (American Motors Javalin) was 25 CENTS per gallon.

[oldwiseone]

If it is going to take ten years

We might as well scrap the plans

because announced just yesterday

is this from MIT

http://web.mit.edu/newsoffice/2008/oxygen-0731.html

free energy!!!

[WASanford]

Not only that, but a group of chemists at Melbourne's Monash University have developed a polymer that will take the place of platinum in fuel cells. The platinum becomes inactive in the presence of carbon dioxide and it's really expensive adding as much as $4000 to a fuel celled car. The polymer is much less expensive adding a few hundred dollars and is more efficient. You can find out more on Tree Hugger.

Big oil is dead and good riddance!

[long333]

http://web.mit.edu/newsoffice/2008/oxygen-0731.html

I split water into hydrogen and oxygen for a 9th grade science fair.

It is fun to light the hydrogen you make on fire it explodes very loudly. Scares all the fair goers!

You can do it with a stripped lamp cord, 2 glasses of water collecting at the positive and negative wire

I couldn't catch the innovation that makes this exciting though. It must be efficiency of producing hydrogen.

If you have never seen this before this is the basic idea of how you can turn electricity into a liquid fuel for the portability in vehicle making long range possible that we have come to enjoy with gas.

[only1Demvoter]

owiseone : Great news !

Thanx for the link.


-ralph

[flagold]

The answer is blowin' in the wind:

http://www.ireport.com/docs/DOC-54768

"Energy In Texas" a CNN I-report on windmills.

[April]

Yes Thank You Jared.

You are a true blessing for the progressive community.

The underlying basis for economics IS the issue difference between democrats and republicans.

This is just dirty politics and man handling of the political process by the oil companies.­..... again! This is getting old. And GWB loves pushing it as a screw you to democrats. You can tell by the twinkle in his eye when he talks about it.

Is this going to be another case in the end of tax payer dollars subsidizing the oil industry to nationalize oil. Bleccchh!

[NTO08]

Obama now supports drilling, with some minor reservations, and I mean minor...le­t's not trash McCain without trashing Obama here...bot­h are wrong.

[MaryanneAZ]

Obama understands that the "average" voter does not care about the environment or how rich oil companies get or how many leases they snag. Voters care about gas prices. The Gang of 10 handed Obama a gift wherein he can now support "limited" offshore drilling and co-opt this winning proposal from McCain. McCain flipped first, so the minor flip by Obama will be a wash and not one the Repubs are likely to point out. This is a win for Obama. I think it is the true explanation of the flat-lining of the Gallup polls--average voters want offshore drilling. We'll have to wait for a President Obama to handle the environmental and other issues for those of us who are Obama supporters and understand that offshore drilling is a bad idea on many fronts. Obama's campaign is smart and has demonstrated great instincts. I think they will handle this issue as well. Obama '08

[LibDrummer]

THis is nt really a yes or no question. The two have very different stance on the drilling issue. Mc Cain wnats the oil companies to have free reign and drill at there will. Obama said he supported some offshore drilling as part a comprehansive energy package. He is open to the fact that there may be a few instances where it might be reasonable to drill for oil but not an open door, drill as you wish policy. This makes sense in preventing the right from finding a single specifice situation where a oil well makes sense, ans then represeneting the whole argument based on that one case. ( Limbaugh logic if you will). The entire dril dril dril bit is nothing but a cheap political ploy by a desperite party that has no real issues to stand on. The energy crisis did not just happen after teh republican domination of our government. We should also keep asking the question, why are the oil companies the only ones not having an energy crisis?