Bush's removing presidential OCS withdrawal puts more pressure on Congress

Responding to congressional Republicans' calls that he make the first move, US President George W. Bush lifted a presidential withdrawal of Outer Continental Shelf acreage from oil and gas leasing.

Jul 18th, 2008

Responding to congressional Republicans' calls that he make the first move, US President George W. Bush lifted a presidential withdrawal of Outer Continental Shelf acreage from oil and gas leasing.

"It's been almost a month since I urged Congress to act, and they've done nothing. They've not moved any legislation. And as the Democratically-controlled Congress has sat idle, [gasoline] prices have continued to increase," he said in a July 14 statement.

"Failure to act is unacceptable. It's unacceptable to me and it's unacceptable to the American people. So today, I've issued a memorandum to lift the executive prohibition on oil exploration in the OCS. With this action, the executive branch's restrictions on this exploration have been cleared away. Now the ball is squarely in Congress's court," Bush continued.

Congress still has to repeal moratoriums it has placed on 85% of the OCS before leasing takes place. House and Senate reactions generally followed party lines as most Republicans applauded the president's action and most Democrats condemned it. "The Bush plan is a hoax. It will neither reduce [gasoline] prices nor increase energy independence. It just gives millions more acres to the same companies that are sitting on nearly 68 million acres of public lands and coastal acres," House Speaker Nancy Pelosi (D-Calif.) said.

House Majority Leader Steny H. Hoyer (D-Md.) said that Bush's announcement simply was another effort to divert attention from six years of the administration's failed energy policies. "It isn't about legitimate drilling access; it's about political messaging access. The president could have chosen to work with congressional leaders to promote responsible oil and gas production. It's clear that he wants political ads, not answers," he maintained.

'Counting on Congress'

But Republicans said that Bush's action puts more pressure on House and Senate Democratic leaders. "Only Speaker Pelosi and her colleagues in the Democratic leadership stand in the way of responsible deepwater oil and gas exploration to help reduce [gasoline] prices. As American families and small businesses face record prices at the pump, they are counting on their leaders in Congress to work together on reforms to help reduce fuel costs," added House Minority Leader John Boehner (R-Ohio).

"The American economy is being dragged down by high energy prices, and President Bush today is demonstrating that he's serious about fixing the problem. With this announcement, it is now crystal clear that the only thing standing in the way of lower energy prices at the pump through increased production is Democrats in Congress," said Sen. Pete V. Domenici (R-N.M.), ranking minority member of the Energy and Natural Resources.

Not every congressional Democrat condemned Bush's action. Sen. Mary L. Landrieu (La.) said that she supported it. "I only wish he would have taken this important step earlier, which would have helped to negate these high prices, and had not waited until the waning days of his presidency. Congress should respond by strategically lifting the congressional moratoriums, and providing the option to states to expand drilling off their shores," she continued.

But many did. Sen. Dianne Feinstein (D-Calif.) said that Bush's move was "a false promise on which he can't deliver. The fact is this: The president is deluding the public into believing that new offshore drilling is a quick fix to $4/gal gasoline. Nothing could be further from the truth. We cannot drill our way out of this problem."

Another OCS leasing opponent, Sen. Bill Nelson (D-Fla.), said that the president "cruelly is misleading Americans for attempted political gain. He knows ruining our coastlines won't bring down gasoline prices nor solve our energy challenges. In fact, a recent report from inside his administration's own energy office found that increasing offshore drilling will have no impact on [gasoline] prices."

'Lands with a plop'

Republicans clearly relished the change. "A ban on drilling in the same Gulf that's open to Venezuelans, Indians, Vietnamese and Cubans never made much sense except as a political barricade erected by anti-oil environmentalists in and out of Congress. Now that the president is voiding the old executive order, the issue lands with a plop on Nancy Pelosi and [Senate Majority Leader] Harry Reid's collective lap. I hope they can figure out a way not to automatically talk themse3lves into a frenzy of opposition that prevents real action to lower gasoline prices," said Rep. Joe Barton (R-Tex.), the Energy and Commerce Committee's ranking minority member.

Rep. John E. Peterson (R-Pa.), who has introduced several bills to repeal congressionally imposed OCS leasing moratoriums, said that Bush's action eliminated one of many hurdles. "Make no mistake: The price at the pump and sky-high natural gas prices are the result of 27 years of failed Washington policies. The politics of fear, implored by 14 consecutive Congresses and three presidents at the behest of radical environmental groups like Greenpeace, Sierra Club and the Center for Biological Diversity are the reasons Americans are paying record prices for energy," he declared.

Bush's move followed a week of actions by congressional Democrats which suggest that they are feeling growing pressure from constituents to increase domestic oil and gas production.

Soon after Congress returned from its Independence Day recess on July 7, Pelosi urged Bush to release crude oil from the Strategic Petroleum Reserve to put downward pressure on prices. Hoyer and other House Democratic leaders proposed leasing within the National Petroleum Reserve-Alaska instead of the Arctic National Wildlife Refuge on July 10. And Reid (D-Nev.) said on July 11 that instead of calling on Congress to open more acreage, Bush should "tell his friends to start drilling in the land they already have."

Meanwhile, Republicans are tying their calls for increased domestic access to oil and gas resources to more aggressive energy consumption and alternative energy research and development. "Lifting the ban is a key part of the House Republicans' 'all of the above' energy plan to lower fuel costs. Enacting this plan, which would increase production of American energy, improve energy efficiency and conservation, and encourage investment in groundbreaking research in advanced alternative and renewable energy technologies, will signal to the rest of the world that America will leave no stone unturned in our efforts to bring down fuel costs," Boehner said.

Peterson and Rep. Neil Abercrombie (D-Hi.) were scheduled to announce the formation of a bipartisan House working group to develop new energy legislation on July 15. There also have been reports that politically centrist senators from both parties and their staffs have been meeting for a similar purpose.

Contact Nick Snow at nicks@pennwell.com

More in Economics & Markets