Congress discussing off shore oil drilling

May 5, 2011

Nearly a year after a BP oil rig exploded in the Gulf of Mexico and created one of the largest environmental catastrophes of all time, federal lawmakers are considering encouraging drilling off the West Coast, including the rich oil beds off Southern California. [CaliforniaWatch]

Lawmakers say allowing the drilling would ease the burden of high oil prices and provide an alternative to foreign oil.

Supporters, including the Energy Nation, an oil industry advocacy group, say the bills will produce more domestic oil and gas, create jobs, provide revenue for the government and secure the country’s energy future, California Watch added.

Critics say the bills (HR 1229, HR 1230 and HR 1231) set the stage for environmental disaster and will have little or no effect on oil prices.

“Not only will the bills expand drilling, they would leave oversight of offshore drilling weaker than it was before last year’s oil disaster in the Gulf of Mexico,” said Bob Keefe, a spokesman for the Natural Resources Defense Council to California Watch.

Richard Charter, senior policy adviser for Defenders of Wildlife, said the bills would have no effect on the “price at the pump.”

“That’s decided by oil speculators who run up oil prices till the price skyrockets,” he said to California Watch.

He referred to a study conducted by the federal government’s Energy Information Administration, which showed that new drilling off the country’s coasts would only reduce gas prices by a few cents.

The bills passed the House Committee on Natural Resources in April, and two of the three bills are scheduled for a vote on Thursday. The third bill, which some call the most sweeping, will likely go to the floor next week, Charter said.

That third bill, HR 1231, or “Reversing President Obama’s Offshore Moratorium Act,” would require the federal government to lease at least 50 percent of available unleased acreage off the West Coast, Alaska, the Gulf of Mexico and much of the East Coast, every five years.

“It’s the ‘Law of Eventually Drilling Everything,'” Charter said.

Under existing law, the government decides which areas to lease. This new law would effectively double the current level of offshore drilling.

And states, such as California, would have no say in the matter.

“Earlier versions of bills like this generally allowed a state to veto projects,” said Regan Nelson of the Natural Resources Defense Council.

“Californians have consistently made it clear that they oppose new offshore drilling off their coast,” she said. “This bill is so out of sync of what people want. They’re willing to put oil production over all other considerations.”

Supporters of the bills say the need for more domestic oil is urgent.

“Gas prices in California’s Central Valley have skyrocketed to above $4 a gallon and remained above the national average for weeks,” said Rep. Jeff Denham, R-Calif., one of the three local congressmen who voted for the bills to California Watch.

“We can no longer afford to rely on energy supplies from unstable foreign sources. The time for inaction is over. We must expand domestic energy production to get Americans back to work, bring relief at the pump and create jobs,” he said.

Along with Denham, Rep. Tom McClintock, R-Calif., and Rep. Jim Costa, D-Calif., supported the bills.

Rep. Grace Napolitano, D-Calif., voted against the bills and Rep. John Garamendi, D-Calif., voted against one of the bills and was absent for the other two.


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Okay boys and girls, I hope you can sit back without all the emotion and see what this battle is really about.

It has nothing to do with the environment, no matter how hard you want this to be the case. It has nothing to do with marine sanctuaries, you’ll see those dissolve when the right people push for change in the rules. And, Virginia, it has nothing to do with pollution. However, it has everything to do with WHO gets the tax money? Does the tax money go to the federal government ( good) or the states (not good in the eyes of the feds)?

Personally, whether it be immigration, protecting American jobs and the economy or spending out money… I don’t think the federal government has done that great of a job.

An interesting view… competition among the sharks, so to speak. Still, many State-level politicians have their drool set on a future National-level position (spring-boards and all). This might explain why our state legislators often shoot our proverbial foot on this.

So somehow if we “allow” for more offshore oil drilling, prices are going to go down at the pump? Yeah, no. The current spiking of gasoline prices have many causes, but the question of supply really doesn’t seem to be that much of a factor. If this were a true “supply and demand” issue at this very moment, why is it that almost every single storage facility is at near capacity? Why aren’t the refineries working overtime to produce as much as possible? The fact of the matter is that the oil producers who are continuing to make record profits are gaming the system as much as possible to keep the price as high as possible. The oil producers get huge subsidies from the government, they store as much crude oil as they can including keeping tankers tied up close to shore that are filled along with all of the other “normal” storage facilities and the refineries keep their production away from maximum to help keep the price at the pump artificially high. When you add in the speculators buying futures contracts that have no illusions about actually taking delivery of the product they are buying and selling, you have the situation that we are in today. “Drill baby drill” is NOT going to affect the price we pay since all of the oil that is extracted is put on the open market, it is not sold “just” to US producers. And don’t the oil companies already have many many leases that they have NOT developed, but could if they wanted to put the money into to doing so?

You *almost* are getting it bob… it’s not a purely Supply & Demand thing (although, mostly it is); there is a FUTURES aspect to it. If the market forces (read speculators) do not see any NEW sources in the pipeline (pun intended) coming down for future production, that will skew the price.

I mean, with your argument, you might just ask, “Why is gasoline at the station, delivered last week/month increased in price? Didn’t they buy it at $X amount?” – yeah, but there is that “futures” aspect coming into play. They know that gas WILL be more next week, possible much more, possible slightly. They price and plan accordingly.

Oil companies do get subsidies, as most industrial sectors do, and I am sure there is a gaming of the system, as ANY TIME the government is involved with a “system” there will be gaming had.

Oil companies are also making record profits because they are having record sales! Come on, that one is easy, don’t drink that kool-aid! I mean, if you sell widgets at $1 a piece, and normally sell 100 a year, then all of a sudden sell 500 a year… you will also make record profits. To find out how much “evil profits” they make, look at their profit margin (percentage). Estimates for this range from $.30 to $.60 per gallon, less than TAXES, by the way.

That NPR story (old, from 2007) had a breakdown for a (now cheap) $3.16/gallon price (non-california, there are more taxes here):

Crude Oil = 50% ($1.58)

Refining = 28% ($0.88)

Taxes = 14% ($0.44) <- half the cost of refining!

Distro/Marketing = 8% ($0.26) <- gas station owner's profit is inside this

The profit margin for the average gas retailer in 2006 was about 6 percent. Compare that to bottled water, on which gas station owner Andre van der Valk says he makes a profit of about 50 percent to 60 percent

“Drill Baby Drill” Is what the oil speculators yell behind you as you grab your ankles at the gas pump.

Increasing domestic production will do nothing for domestic gas prices unless the congress also passes regulation of oil futures selling and buying and also prohibits the sale of unrefined crude to other countries and prohibits foreign based companies from drilling in the US.

Think that’s gonna happen? I’ll tell you what is MORE likely, A huge oil spill off the California coast.

I’m afraid the futures traders have been made out to be the bad guys here (that’s ok, we feel more comfortable pointing to a bad guy than not). Futures traders are only representative of how they see the market in the future (hence the name). If they see oil production ramping up, refineries being built, etc. to increase future oil/gas flow, then they price the stocks/commodity down (shorting) – with cheaper gas as the result (but everyone forgets how evil they are when that happens).

It’s like yelling at your bandaid for getting a cut on your hand. Or said bandaid should take responsibility for the wound. One is only a result of the other, not vice-versa.

“…the largest environmental catastrophes of all time…”

Where is all of those millions of gallons of oil now? Hasn’t even been a year since they capped it, so where’s the oil? Where’s the catastrophe? We were told that the Gulf may never recover.

Kinda like now, we are being told that drilling off of the CA coast is a disaster.

Quick question: Which one kills more birds annually, crude oil spills or strikes from wind turbine blades?

which is more carcinogenic, epigenetic ?

Good that your are so knowledgeable. Have you been down to the 14,000 foot deep floor of the Gulf of Mexico lately? Do you believe that the “Deepwater Horizon” blowout material has magically dissipated?

Some folks manage to live contentedly by believing that if they cannot see it for themselves, it’s not true. I tend to be a bit pessimistic when info comes from reps of the most monied corps. on earth. The oil cos.

Why has no one asked “What were dinosaurs doing down there in the first place?” – that’s pretty deep. Unless you’re an Abiotic Oil supporter… >.>

That would just upset way too many apple carts.

That isn’t all they will be discussing in the coming weeks Stay tuned because they will be mentioning Kelly Gearhart and grigger Jones and our situation with respect to our father’s trust

All related to the Pe Ji Ho Ta casino YEAH! I will keep you posted

Oye Vey, I can’t battle all you righ wingers again. I know I know, drill baby drill, screw the environment bla bla…..Same old song and dance.

OK,I’ll bite.

Show me one new nuclear power plant, oil refinery, hydro electric plant approved and built in the few decades here in CA. How about one new alterantive fuel that actually works or does not create more problems than it solves? Every one jumped on the ethanol bandwagon, yet it is not compatable with many engines and the corn grown to produce it has spiked the cost of food corn world wide.

Also, since all the enviros want us to drive electric cars (or donkeys) where do you suppose the electricity will come from? The newly planned but on hold solar plant out in the Carrizo?

We are dependent on foreign oil for a number of reasons most I blame our government and legislators for. And since there are millions of oil fuel autos, trucks and trains who will be the first to give up those in favor of walking? How about the millions of items we use every day that are oil based or made from oil? Who will be the first to give up buying vegetables or fruits? They do not use electric tractors in agriculture and we ship all of our goods on oil based transportation.

Until we come up with a real working perpetual motion engine or alternative system that works we are going to be stuck for awhile with oil. Better get used to it…

I don’t have the time nor energy to go on about this, I certainly won’t change anyone’s minds on this. But I will give a quick response simply because I just can’t help myself.

The oil companies won’t allow us to even try to go to alternatives, all the politicians right and left have oil money in their pockets. But hey, China is going fast forward on alternative energy, they’s pass us up and soon we will be buying thier products. We are no longer the leaders innovation. Americans no longer have the desire to be number one, we used to be the leaders, man on the moon, Ford, the Wright Brothers, Edison, on and on. Now we will hear Chinese names. Yeah, lets just keep doing the same thing, lets not move forward, lets let the oil companies tell us what to do.

“all the politicians right and left have oil money in their pockets.”


I would have to disagree about the USA not being innovators or leaders in technology. IMHO, we have the capability to do great things if the governement and legislators get out of the way. Why do you think a large number of once American run companies have left or reopened overseas? And taken American jobs and given them to foreigners as well?

Too much regulation and red tape, coupled with the supposed trade aggreements..

They left this country because of cheap overhead ie labor and I do believe that we are falling behind. What regulation and red tape are you talking about? I just read a big article about China’s push to be number one in alternative energy. Usable and practical alternative energy is becoming one of their main goals that they are devoting a great deal of money to being world dominate in that arena.

As a business owner how many hoops do you have to jump through, how many infrastrucure improvements do you have to do if you want a building permit, how many OSHA rules do you have to comply with, how much do you pay in fees and taxes every month?

If I am not mistaken China is one of the worlds biggest polluters and IMHO they are striving for world dominance in all arenas… And they do not have any of the same requirements we do as American business owners.

I agree that a cheap, renewable and safe energy source would be great, but we just aren’t there yet.

We aren’t there and we aren’t doing enough to get there (re. renewable safe energy).

I need to make more for the taxes not to be an issue and we are getting back on that path. The only thing you said that irks me is OSHA. I can see a need for OSHA but if you get a power trip inspector it can cause a lot of extra expense. I don’t believe that the hoops an is an issue for big corps though, they hurt us small businesses more that then big businesses. I’ve always said that this country is set up to make the big corps richer and to squash the little corps like me. So I do believe that big corps can make money and without that much hassle. We have laws and regulation that are important. Child labor, fair pay, safety requirements and taxes, those are all things that we need and I’m glad that we have those regulations. But the big corps go off shore because of greed, they don’t care about human rights or supporting our country the only they (most) care about is $$$.

Since we all share one planet, I would think the globally-aware environmental community would be enthusiastic about oil production right here where we can monitor it and make it conform to our environmental laws. Contrast this with oil production overseas, where there are perhaps laxer, and less-enforced, environmental standards.

Yeah, like how Florida was able ot monitor the Gulf Of Mexico.

My point is, I wonder how the BP spill would have played out without our government and our citizens demanding a clean resolution. Could well be that if it happened elsewhere, it’d still be spewing.

Could be that it’s happening elsewhere RIGHT NOW, and we don’t know or care.

Wow zap, you find the most interesting articles. That’s disgusting and very sad.

@racket, it could be worse so we should do it. That argument doesn’t hold up for me. My employer is making me work with a machine that is dangerous and cut off my right arm,,could be worse, it could have cut off both arms. I don’t want to choose between two arms or one. I don’t’ want to have another Exxon Valdez or Gulf of Mexico disaster just because we have the idea that they could have been worse. They’re going to drill in other countries anyway. If there is a disaster and they don’t handle it well it will happen whether we drill or not. At least we should try and keep our environment clean even if other countries choose not to keep theirs clean.

Right on, we cannot be held captive by others for their bad behavior. Drilling here

to prevent others from drilling is not rational. We should not despoil our lands, air and water for money for the corps (who have made record profits lately) or to satisfy our wasteful lifestyles. We need to save, not drill.

It’s about time