House Energy Bill Is a Good Starting Point

The News & Advance
Published: September 24, 2008

Granted, there’s enough politics in the House-approved offshore drilling legislation to make even the most blatant ward politician blush. But after all the debate — some of which was acrimonious — the measure is a step in the right direction as it relates to America’s future energy needs.

Some news organizations reported the vote as a “stunning political turnabout.” That’s because the majority Democrats finally decided it was time to take a serious look at offshore drilling for oil and natural gas on the East and West coasts.

(And in another shocker, just Wednesday in a separate piece of legislation, the House Democrats decided to allow the 26-year-old ban on offshore drilling to expire Oct. 1. Could the House majority party finally have seen the light? Miracles do happen.)

The other stunning turnabout in the vote is that the House Republicans, who have argued vehemently in favor of drilling everything in sight for oil, voted against the bill. One reason is that the bill prohibited exploration of the Arctic National Wildlife Refuge in Alaska, the nation’s last pristine wildlife refuge.

The bill would provide for drilling as close as 50 miles off the Atlantic and Pacific coasts and finance the long-term development of alternative energy sources. If drilling were to take place between 50 and 100 miles offshore, the states would have to give that approval. Otherwise, drilling could occur 100 miles off the coasts.

The legislation now moves to the Senate, where approval faces a difficult road to getting the 60 votes needed for passage.

Democrats argued that the increased taxes on oil companies in the bill and the collection of royalty payments from the drilling would yield billions of dollars to help finance the development of cleaner, renewable energy sources.

Rep. Virgil Goode, R-5th, has been a vocal supporter of offshore drilling, but said he voted against the measure because it does not provide a share of the revenues from offshore oil to the states involved. He pointed out that Texas, Louisiana, Mississippi and Alabama all share in the royalties from offshore drilling in the Gulf of Mexico.

Goode makes a good point — and one that could decrease the incentive for state governments to approve drilling closer to shore. House Speaker Nancy Pelosi has indicated some willingness to consider a compromise on that issue.

Republicans also opposed the measure because it would repeal tax breaks given to major oil companies in 2004 legislation and would force companies to pay for leases given to them in the late 1990s for drilling in the Gulf of Mexico. According to Democratic estimates, that was a move that has saved the oil companies some $15 billion over the past decade.

With the oil companies reporting record quarterly profits in the billions of dollars, let’s not get too teary-eyed over their potential loss of revenues in the form of tax breaks.

The energy bill has some other features that could help push down oil prices and improve incentives for alternative sources of energy. It would release 10 percent of the oil in the federal government’s strategic reserve, which supporters say will push down retail gas prices. It would also provide new tax credits for companies developing a variety of alternative energy sources, including wind, solar and biofuels.

Another interesting requirement is that utility companies generate at least 15 percent of their electricity from renewable energy sources by 2020.

The House legislation is not perfect, by any means. But it is a start, a necessary start if Washington is serious about breaking the stranglehold that foreign oil has on the United States.