Senate opens eastern Gulf for drilling

The Hill:

A Senate panel voted on Tuesday to open up a huge new swath of the Gulf of Mexico to oil and gas drilling at a moment Democratic leaders are working to curb greenhouse gas emissions from tailpipes and other sources.

Supporters heralded the move by the Senate Energy and Natural Resources Committee to open up the eastern Gulf that is now blocked to developers as a step toward a comprehensive plan that embraces all forms of energy and would reduce dependence on foreign oil.

But critics saw the step as backwards, given the emphasis in Congress on solving climate change and carbon dioxide emissions caused by the burning of fossil fuels like oil and natural gas.

“You are moving in the wrong direction by open up a vast new area for oil and gas drilling at a time when you want the focus to be on renewables and conservation and all sorts of other things,” said Michael Gravitz, an oceans expert at Environment America.

“It’s not like last summer. You don’t have people chanting ‘drill, baby, drill’ in the streets or at political conventions.”

But oil costs have been increasing. On Tuesday, per barrel prices closed at around $70. That’s well above the $32 per barrel that prices had sunk to last December but well short of the record $147 per barrel price hit last summer when Republicans on Capitol Hill successfully pushed to end drilling moratoria that had prevented access to most areas offshore.

The Senate committee adopted the amendment offered by Sen. Byron Dorgan of North Dakota, who even as a Democrat has promoted opening more areas of the outer continental shelf to oil and gas production. Eight Democrats including Dorgan and Committee Chairman Jeff Bingaman (D-N.M.) voted yes on the amendment. Five Republicans voted no.

The bill does not give states a share in the drilling royalty payments, which some Republicans on the panel had sought.

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The Democrats who object to this drilling do not object to buying oil from Venezuela and possibly Cuba, but do object to American jobs and companies profiting from our own oil. They will also object to the reduce prices that will result from increased supply because it will make their alternatives less attractive. This is good news for American and Dorgan and Bingamen deserve some props for having the courage to vote for the bill.

Dorgan is something of a deficit hawk and I think he sees the revenue potential from royalties as a way to cut into the huge deficit that Obama is piling up.

The Houston Chronicle has more on the proposal.