Nobody should be surprised to see members of Congress rushing in front of the TV cameras to take political advantage of the Deepwater Horizon oil spill disaster in the Gulf of Mexico.
But couldn’t they at least stick to the facts?
Take Sen. Bill Nelson, D-FL, who earlier this week told Oil Daily that he persuaded Senators John Kerry of Massachusetts and Joe Lieberman of Connecticut not to include in their new cap-and-trade anti-global warming bill provisions to open up eastern areas of the Gulf to new oil and gas exploration and drilling.
“I’m glad the climate bill includes my proposal for a moratorium on any new drilling, until we know what happened aboard the Deepwater Horizon. They had their eye on expanding drilling into new areas of the Gulf of Mexico near Florida, and I told them to stay out of it. And I’m glad they listened,” he said.
That’s fine, but Nelson knows better because, as a long-time opponent of development of the eastern Gulf, he is aware that energy companies are focused on natural gas resources in that region, especially an area known as the Destin Dome.
As Dan Kish, vice president of the Institute for Energy Research told Oil Daily, “If what had happened with BP in the Destin Dome area, for example — based upon everything we know — there would be nothing but big bubbles of natural gas coming to the surface. There is no oil there because of the geology.”
Oil Daily also noted that water depths in the eastern Gulf off of the Florida coast tend to be much shallower than in the western area off Texas, Louisiana and Mississippi. Drilling tends to be less complicated in shallower waters. You can read the full Oil Daily story here.
Even as the U.S. maintains its hands-off policy toward the eastern Gulf, other nations are moving forward in efforts to develop oil and natural gas resources in the Gulf. Russia, for example, signed a deal last year with Cuba, as did China and India in 2006, and Brazil in 2008.
Over on the Pacific side, senators from California, Oregon and Washington are falling all over each other to ban exploration and drilling off of their coasts.
As the Seattle Times pointed out, Washington has no known or suspected oil or natural gas resources off its coast, but that didn’t stop Senators Maria Cantwell and Patty Murray from co-sponsoring a permanent ban on such activities along the entire U.S. Pacific shoreline.
By the way, approximately one-third of all U.S. oil is from the Gulf area where an estimated 4,000 active rigs are in operation.
And here’s something else to think about. As SMU’s Prof. Bernard L. Weinstein writes in today’s Houston Chronicle, even without a new ban on off-shore exploration and production, President Obama and the Democratic majority in Congress are moving toward massive new taxes and tax code changes on the energy industry that could drive prices at the gas pump sky-high:
“The Gulf oil spill will also amplify those voices in Washington who want to hike taxes on the oil and gas industry by roughly $40 billion in order to provide additional subsidies to ‘safer’ energy sources such as wind and solar. According to the Independent Petroleum Association, these tax increases would fall disproportionately on small drilling companies and could potentially reduce domestic oil and gas production by 20 to 40 percent.
“In addition, President Obama has proposed a 13 percent excise tax on offshore production and called for repeal of the manufacturing tax deduction for the nation’s six biggest oil companies. The administration also proposes to place new taxes on the industry’s foreign operations by changing the rules that apply to certain international earnings.
“Without question, hiking the tax burden on America’s oil and gas companies will mean less, not more, domestic energy production. Thousands of jobs will be destroyed, billions of potential investment dollars will flow overseas, imports of fossil fuels will increase, energy prices will rise, and many states and localities who derive revenue from oil and natural gas production will witness further declines in their tax receipts.”
You can read the rest of the Weinstein oped here.
