August 15, 2008

August 15, 2008 | Commentary on Energy and Environment

The great American freedom machine

A great con game is being played out in Washington, D.C.

The public is clamoring to open the spigot for American oil andgas. Drill Now. Drill Here. Pay Less. About 70 percent of the public say we should end the ban on offshore drilling. Even most Californians agree!

So the liberals who dominate Congress are going to do something about the problem. The political problem, that is. Not the energy problem.

They will have a vote on offshore drilling. Sort of. Just enough so they can tell voters they "got the message" and "did something" - but no more, and not enough to make a difference in gasoline prices. And this pretense will be lumped in with a bunch of bad ideas and big spending.

It will be a package deal, labeled "comprehensive" energy legislation.

That's the word to beware - comprehensive. When applied to immigration legislation, it was code that meant "includes amnesty." When it was applied to housing, it meant that reforms of Fannie Mae and Freddie Mac were accompanied by tens of billions of giveaways to the industry and to left-wing groups.

When applied to energy, "comprehensive" means a little bit of drilling and a lot of drooling over the goodies to be given away.

House Speaker Nancy Pelosi, D-Calif., recently (and several times) has telegraphed the message that a bill that includes some offshore drilling can be brought up in the House despite her long-time adamant opposition to that drilling. But, she carefully caveats, a drilling provision will be considered only as part of a larger package. Here's what to expect will be included:

  • Minimal expansion of offshore drilling. Very minimal. It may resemble the recent proposal by the bipartisan "Gang of Ten" senators, which would give only conditional approval to drilling off the coasts of only four states - Virginia, North Carolina, South Carolina and Georgia. Conspicuously missing are Florida, the eastern Gulf Coast area, the entire West Coast and offshore Alaska. Also missing is drilling on other public lands, including the Alaskan National Wildlife Refuge. In other words, all the areas thought to have large oil and gas deposits would remain off-limits.

  • The liberals' perennial favorite, a "windfall profits" tax. The old Jimmy Carter-era version reduced domestic production by about 5 percent, increased oil imports by about 15 percent and generated only a fifth as much money as sponsors promised - all because it reduced incentives to produce domestic energy. It didn't help then, and it won't help now. By adding an extra cost, the windfall profits tax makes gasoline more expensive, not cheaper.

  • Other increases in oil and gas taxes, possibly in the $35-85 billion range. Liberals want more tax monies to give as subsidies to producers of alternative (but not nuclear) energy. Despite years of massive subsidies, these alternatives remain too expensive to compete with $120-a-barrel oil.

  • A sell-off of oil from America's Strategic Petroleum Reserve. This move might make a momentary blip of lower gasoline prices, but it would leave us unprepared for military emergencies. (Russia's attack on the Republic of Georgia and its oil pipelines demonstrates how quickly supplies from overseas could be cut off.)

  • A "use it or lose it" restriction on drilling on public lands. It's a bit of puffery intended to embarrass energy companies for not drilling in areas where there's not enough petro-carbons to justify it.

  • A sham "crackdown" on commodity speculators. In the liberal canon, speculators are the bogeymen who supposedly made oil prices rise. Somehow, these imagined culprits disappeared when prices fell.

  • Lawsuits against OPEC.

Missing from the legislation will be any provision to remove the red tape that has frustrated drilling, thwarted nuclear power plants and blocked any new refinery construction for decades in the USA.

The liberals don't want the package to reach President Bush's desk; they only want news of it to reach voters' ears. That's why they'll lace what should be a straightforward drilling bill with all these poison pills. All they really want is a legislative fig leaf that will let them pompously proclaim they are "for" expanding offshore drilling, albeit in a highly nuanced "comprehensive" framework. The strategy is to undercut the public gains made by minority House Republicans (who continue to hold their rump session while Congress is out of town until after Labor Day) with a bill that leaves the GOP spluttering, "That's not what we meant!"

It's all a holding action to punt the energy issue into next year, when a new president will deal with the issue - and with a Congress that values politics as usual above all else. That's how we got into this mess, and that's what will keep us in it.

Ernest Istook is recovering from serving 14 years in Congress and is now a distinguished fellow at The Heritage Foundation.

About the Author

Ernest Istook Distinguished Fellow
Government Studies

Related Issues: Energy and Environment

First appeared on World Net Daily