by Iain Murray
September 17, 2008

The Energy Bill currently under consideration in Congress is being widely touted as a compromise, because it includes some provision for drilling. The implication is that House Democrats, bombarded with complaints from their constituents over high energy prices this summer, have bowed to the inevitable and reached out to their Republican opponents to agree on a new dawn for drilling in the United States. Nothing could be further from the truth. The bill is simply a rehash of old measures aimed at making affordable energy more expensive, fronted by a bait-and-switch on drilling.

Let’s look at the drilling provisions first. Yes, a small amount of offshore resources are opened up for drilling. Yet the bill also closes off a lot that is currently open. The drilling provisions would:

• Permanently ban access to about 97 percent of the undersea oil lying within 50 miles of the California coast.

• Continue the ban on energy production in the Eastern Gulf of Mexico.

• Impose a brand-new ban on oil and gas leases in Alaska’s coastal waters out to 50 miles.

• Not allow states that approve new leases beyond 50 miles to share royalties with the federal government, thus stripping any financial incentive for states to stand up to environmental pressure groups, who will continue to agitate against any new oil and gas operations offshore.

The Bill also contains a host of phrases – such as the one requiring “environmentally responsible” drilling – that are simply invitations for the environmental lobby to sue to prevent drilling. Speaker Pelosi knows this. As Rep. John Shadegg said in the Wall Street Journal today:

The Sierra Club has told its members that it is “working to ensure that the final bill’s focus is on real clean energy solutions rather than expanded offshore drilling.” Democratic Rep. John Murtha, a Pelosi confidante, went further last week in noting that his party’s not above cynical politics: “This is a political month. There’s all kinds of things we try to do that will just go away after we leave.” And Legislative Director for the Natural Resources Defense Council Karen Wayland has said “This is about politics, not necessarily about policy.”

The green lobby, however, is not going away. EarthJustice, which employs over 150 people, has filed hundreds of lawsuits. On its Web site, it says “Because lawsuits can be so effective, we have a team of policy experts in Washington, D.C. that work hand-in-hand with our attorneys to stop legislative backlash…”

So the so-called pro-drilling bill would probably actually reduce the amount of drilling in the future. This is no compromise at all.

Meanwhile, what will the bill achieve? Take a look at the rundown prepared by the Institute for Energy Research. It is a laundry list of everything environmental groups have been demanding in the energy sphere over the past few years:

• New taxes on oil companies (making them even less competitive with their OPEC rivals and probably keeping the price of gas high) and coal companies (the single best source of secure domestic energy)

• Huge investment in mass transit, which will raise transportation costs and reduce incomes

• More “green building” regulations, which push up the cost of new buildings and renovations

• A mandate on utilities to provide 20 percent of their electricity from renewable sources by 2020, which will significantly increase household electricity bills

• Large amounts of “green pork,” such as $50 million in pilot programs for more energy efficient multi-family dwellings, $25 million in funding per year for a “National Energy Center for Excellence” at two universities, special payroll tax breaks for governments around New York City, special benefits for bicycle commuters and a staggering $2.25 billion in tax credits integrated gas and combined cycle projects and advanced coal-based generation

• Mandates and fines on gas stations to provide costly new alternative fuel pumps, costs likely to be passed on to the consumer again.

There is very little in this bill that energy consumers can be glad about. The environmental industry, however, will be licking its lips at the handouts it will be receiving if it passes.

Iain Murray is Senior Fellow in Energy, Science and Technology at the Competitive Enterprise Institute and author of The Really Inconvenient Truths, new from Regnery Publishing.