It seems that the Democrats have crafted a plan to “make America energy-independent of foreign oil within a decade:”
WASHINGTON — Oil and natural gas producers might soon be able to drill in the eastern Gulf of Mexico as well as along the Atlantic coast from Virginia to Georgia under an energy plan being crafted by House Democrats.
While details are still being worked out, the plan would raise taxes on the oil companies; force producers that benefited from botched lease agreements with the government to pay royalties; require electric utilities to generate 15 percent of their power from renewable sources; and provide loan guarantees to automakers to help produce more fuel-efficient cars.
Pelosi insisted the plan would “make America energy-independent of foreign oil within a decade.”
Really? How? Is increasing taxes on the oil companies going to increase supplies? Is forcing renegotiation of the leases going to reduce demand? How is the electric utilities provision going to affect either since we don’t produce much electricity from oil? (Note that I am not necessarily against all of these provisions, they just aren’t going to help close our supply/demand imbalance).
The drilling itself should bring a little oil online (not nearly enough to make us energy independent), but I suspect the conditions are going to be Draconian enough that oil companies won’t be lining up to take part in the lease auctions. No, I suspect this is just a bit of political smokescreen as Pelosi is starting to feel the pressure from the “drill here, drill now” crowd. She wants to offer up a bill that won’t actually result in any drilling, but will allow her to claim that she supported drilling.
I still believe the compromise I suggested previously is the right one. Open up some drilling, and earmark the money for programs designed to reduce our fossil fuel consumption. And by ‘programs’, I mean actual programs and not some pandering line about taxing oil companies to promote energy independence.
After all, let’s face facts. There was enormous pressure to drill when gasoline cracked $4/gal. It is only going to increase as gas creeps higher and higher in the coming years. Right now the Democrats have some leverage in which to get a compromise that will help stem the demand side of the equation. But that leverage will disappear as the cries to drill grow louder and louder.