Reversing Course on Drilling

President Bush has reversed course on the disruptive energy policy that prevents exploration and development of offshore oil fields. He now calls upon Congress to lift the moratorium on drilling on the federal Outer Continental Shelf. With gas prices at $4 a gallon, the exploration and development of those resources could bring the price of oil down over time as well as reduce reliance on foreign oil.

Democrats have generally opposed the offshore drilling, as have some Republicans who represent coastal states claiming that they worry about the potential harm to tourism and the economy from spills.

Bush also will reiterate his call for development of oil in the Arctic National Wildlife Refuge in Alaska, Perino said. McCain has opposed drilling in the refuge, maintaining that the pristine areas in northeastern Alaska should be protected from energy development.

On Monday, McCain made lifting the federal ban on offshore oil and gas development a key part of his energy plan. The Arizona senator said states should be allowed to pursue energy exploration in waters near their coasts and receive some of the royalty revenue.

Bush has made clear in recent weeks that the drilling moratorium in coastal waters should end to allow for more domestic oil production and help "take the pressure off the price of gasoline."

Democrats, as well as some Republican senators from coastal states, have opposed lifting the drilling prohibitions, fearful that energy development could harm tourism and raise the risk of oil spills on beaches.

Sen. Barack Obama, the Democratic candidate for president, opposes lifting the ban on offshore drilling and says that allowing exploration now wouldn't affect gasoline prices for at least five years.

Congress imposed the drilling moratorium in 1981 and has extended it each year since by prohibiting the Interior Department from spending money on offshore oil or gas leases in virtually all coastal waters outside the western Gulf of Mexico and in some areas off Alaska.

Obama is somewhat correct that the exploration wouldn't affect prices for at least five years. It would probably take five years or so for oil to come to the market from those locations, but the fact that the US is now drilling and exploiting those oil fields would affect prices because speculators would now have to contend with new reserves coming to market.

Further Obama thinks that drilling is a bad idea altogether. The complaint that it would not affect prices is mere cover for the fact that he doesn't seem to mind the higher prices.

The Democratic Party leadership also opposes the drilling, claiming that this is simply a sham and that the oil companies are behind this latest move to allow drilling. Never mind, of course, that the oil companies are at the mercy of the international marketplace and foreign countries dominate the world's oil supply, not domestic oil companies.

After hearing of Mr. Bush’s proposal on Tuesday night, Mr. Reid affirmed his opposition, saying, “The Energy Information Administration says that even if we open the coasts to oil drilling that won’t have a significant impact on prices.”

And the House speaker, Nancy Pelosi, said, “The president’s proposal sounds like another page from the administration’s energy policy that was literally written by the oil industry: give away more public resources to the very same oil companies that are sitting on 68 million acres of federal lands they’ve already leased.”

The Congressional moratorium was first enacted in 1982, and has been renewed every year since. It prohibits oil and gas leasing on most of the outer continental shelf, 3 miles to 200 miles offshore. Since 1990, it has been supplemented by the first President Bush’s executive order, which directed the Interior Department not to conduct offshore leasing or preleasing activity in areas covered by the legislative ban until 2000. In 1998, President Bill Clinton extended the offshore leasing prohibition until 2012. One person familiar with the deliberations inside the White House said that Mr. Bush was briefed on Tuesday by his top aides, including Joshua B. Bolten, the chief of staff, and that the aides recommended lifting the executive order.

On Capitol Hill, Republicans are proposing several bills to undo the ban. They differ on how close to shore drilling could begin, but all would give states a veto on oil exploration within 100 miles of their coastlines. Ms. Perino said Mr. Bush believed Congress should pass one of the bills, so the federal government and the states could work together to share revenues from exploration.

The issue does not fall entirely along party lines. One prominent Republican opponent of drilling, Gov. Arnold Schwarzenegger of California, does not intend to change his stance, a spokesman said Tuesday. In Houston, meanwhile, Mr. McCain, who has long been at odds with Mr. Bush on another environmental issue, climate change, tried to distance himself from the White House.

The Democrats are squarely pushing the notion that higher prices are acceptable, and that the way to solve the problem is through taxing those same oil companies even more as though that will somehow encourage them to make more oil or reduce the price of oil.

The ongoing "policy" by Democrats reeks of a failure to understand Economics 101 and supply and demand. The failure to drill and produce oil domestically does affect the prices - sending them higher. It does increase reliance on parts of the world that are volatile and sends billions of dollars to regimes that are antithetical to the US and Western interests.

By standing in the way of drilling, the Democrats expose themselves for what they are - no interest in lowering prices except through demagoguery.