Is There Political Gold in Offshore Drilling for Obama?

Salazar’s Drilling Plan Delay is Nice … But Is It Substantial?

A last-minute plan submitted by the Bush administration to expand offshore oil and gas exploration on the Outer Continental Shelf (OCS) was delayed Tuesday when Interior Secretary Ken Salazar extended the proposal’s public comment period by 180 days.

The move was a relief to environmental concerns, pro-drilling advocates and politicians, because while Salazar slowed down the moving train to vastly expanded OCS exploration, he didn’t stop it completely either.  The situation is one of rather odd bedfellows that deserves deliberate scrutiny.

The Bush administration’s plan was released on the final federal workday only four days before leaving office.  It was first published in the Federal Register the day after the Obama administration took over the reigns of power.  The comment period extension moves the deadline from March 23 to September 23, which allows time for the Obama administration to consider input from diverse interest groups.

The plan put forward by the former administration opened up the California coast and the entire eastern seaboard to exploration that have been under a moratorium for the past 26 years.  The drilling moratorium expired last year when Congress failed to reaffirm it.

House Speaker Nancy Pelosi (D-CA) hailed the move in a statement issued Tuesday evening.  “The new administration is stopping this headlong rush to open new offshore areas of drilling, calling for a thorough review, with much greater public participation,” the press release stated.

Drilling proponents seemed equally pleased, because there was no immediate move to reinstate the drilling moratorium.  A report in USA Today quoted Nicolette Nye, spokeswoman for the National Ocean Industries Association, as saying, “We don’t see this as a bad thing.  We’re pleased the new administration is continuing with the … process.”

At least one environmental group seemed happy about Salazar’s decision as well.  Wesley Warren, director of programs for the Natural Resources Defense Council stated in a release, “There’s a new way of doing business at the Department of Interior under Secretary Salazar. By committing to a thorough review, Salazar is demonstrating bold leadership that will offer America a new energy future that provides clean domestic energy and cuts our dependence on foreign oil.”

But it’s unclear what value OCS oil reserves would have to the current administration’s energy strategy.  According to the Energy Information Agency (EIA), the impact of increased access to oil and natural gas from the OCS, “… [will] not have a significant impact on domestic crude oil and natural gas production or prices before 2030.”  By that time, the EIA concludes in another document that oil supplies will have already “peaked” or be in permanent decline as detailed in a previous WTTW article. 

The OCS supply would therefore have little or no affect on prices at all, because worldwide production would already be in an irreversible downfall.

Given the above information from the EIA, any move to recover the relatively insignificant portion of the world’s oil reserves from the OCS would have dubious value to consumers but could be potentially rich in political symbolism for the administration.

For now at least, everyone seems happy.

Are you?