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What Will Happen When the Offshore Drilling Ban Expires?

Democrats Agree to Let Offshore Drilling Ban Expire; Republicans Rejoice

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In September 2008, House Democrats handed congressional Republicans a victory by agreeing to let the 26-year-old moratorium on offshore drilling expire on September 30. The Democrats made their decision amid the growing public outcry about high gasoline prices and concerns about the struggling financial markets, and after President Bush threatened to veto a proposed $630 billion funding bill and shut down the federal government if the legislation included language to renew the offshore drilling ban.

Bush Refuses Any Restrictions on Offshore Drilling
The White House also rejected a Democratic plan to include a modified proposal, passed recently by the House of Representatives, that would have opened some coastal areas to offshore drilling provided they were more than 50 miles offshore and the affected states agreed. As a result, the proposed funding bill will say nothing about offshore drilling, which will have the effect of lifting the ban that state lawmakers and environmentalists have fought successfully to keep in place since it was first established in the early 1980s.

"Unfortunately, the president's willingness to veto any sensible compromise on offshore drilling, which would have threatened to shut down the government and send a dangerous signal during these hard economic times and a financial crisis on Wall Street, led to the expiration of the current moratorium," House Speaker Nancy Pelosi said in a statement.

The funding bill is a stopgap measure that will finance government operations until March 6, and effectively refer most major government spending decisions to the next Congress and the new president. Assuming the bill passes and is signed by President Bush, as most observers expect now that the offshore drilling ban has been removed, there is a good chance that Congress will not need to return to Washington, D.C., for a lame-duck session after the November elections.

Lame-duck sessions are always problematic because inevitably there are representatives and senators who are still officially members of Congress until the new members take their oaths in January, yet have just been voted out of office in November.

So what are the short-term and long-term effects of ending the ban on offshore drilling?

Short-term Effects of Lifting the Offshore Drilling Ban
The short-term effects of lifting the ban on offshore drilling are likely to be negligible. Technically, on October 1, America’s coastal waters would be available for oil and gas exploration, but new leases take time to negotiate and must go through a long process at the U.S. Department of the Interior, so it’s not as though people in coastal states such as California, Georgia and Florida are going to wake up the next morning and see new offshore oil platforms lining their beaches.

On the other hand, America’s coastal waters will be less protected, and their future less certain, than they have been for more than a quarter century. Oil companies will be free to apply for new leases, those lease applications can be set in motion, and new leases could be in effect as early as 2011 under current U.S. Interior Department rules.

Long-term Effects of Lifting the Offshore Drilling Ban
Assuming the offshore drilling ban is never reinstated, the long-term effect of lifting the ban will be a significant increase in oil and gas exploration along America’s coastlines and many new offshore oil platforms in U.S. waters up and down the Pacific and Atlantic coasts.

Coastal states have long feared the potential damage offshore drilling could cause through oil spills—like the 3-million-gallon spill Santa Barbara suffered in 1969—soiled beaches and reduced tourism. More offshore drilling also means more onshore refining; more oil, gasoline and other petrochemical products moving through pipelines; and more marine and ground transport. And as history has shown, refineries, pipelines and oil tankers are just as vulnerable, perhaps more vulnerable, to extreme weather, seismic events, and human error as offshore oil rigs.

According to oil companies and some government scientists, there are an estimated 18 billion gallons of oil below the Outer Continental Shelf, which could be extracted by offshore drilling, so lifting the ban now would eventually result in more domestic oil. On the other hand, offshore drilling will take decades to deliver that oil, so it will have no immediate or short-term effect on current gasoline prices or domestic supplies. And unless Congress enacted legislation to reserve offshore oil for domestic use, there is no guarantee that the oil companies wouldn’t sell the oil they extract from U.S. coastal waters to the highest bidder.

Another concern is that promising consumers a new supply of domestic oil, regardless of how time-consuming or expensive it may be to extract, may reduce the sense of urgency to conserve and to focus on developing new sources of renewable energy that won’t contribute to global warming.

Can the Offshore Drilling Ban be Reinstated?
House Democrats and leading environmental groups have promised to work to re-establish the ban on offshore drilling in 2009 and beyond. Even if the Democrats increase their congressional majorities after the November election, however, they may not have enough votes or enough public support to reimpose a sweeping moratorium on offshore drilling like the one that will expire on September 30, 2008.

Many Republicans currently in Congress favor offshore drilling, and growing public concerns about high gasoline prices and U.S. dependence on foreign oil has caused some Democrats to reconsider their positions and support a partial increase in offshore drilling.

Republican presidential candidate John McCain now favors offshore drilling, after opposing it for many years, and has made it a cornerstone of his proposed “all of the above” energy policy. And even Democratic presidential candidate Barack Obama supports including offshore drilling as part of a comprehensive energy package.

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