In a move certain to distress those
who believe that oil spills are caused by presidential proposals to drill offshore, last week the Obama administration announced
a new offshore oil and gas lease sale.
Tied to this most generous offer of new leases is a plan to increase the minimum bid from $37.50 to $100 per acre, to "ensure that taxpayers receive fair market value for offshore resources". This will certainly stick it to the big oil companies who, according to the narrative, curiously spend millions to acquire leases on which they have no intention of drilling. The fact that oil and mineral leases represent one of the largest sources of nontax revenue to the treasury is apparently beyond the scope of the article.
The more jaded of you may recall that the president blocked construction of the Keystone XL pipeline the week before, citing the need for further environmental studies, in addition to the three years of existing environmental studies. In addition, the threat of US sanctions has Iran threatening to block the Strait of Hormuz, and with it much of the middle east's oil production. Other than that, there is really no reason to ramp up domestic production, after all, if we did that, it would be years before we produced any new oil from new drilling, right?
But don't you go thinking that the Obama administration is not in support of offshore drilling, far from it! In fact, if we go back to April of 2010, mere weeks before the BP spill, Obama proposed opening the eastern Gulf of Mexico, the north slope of Alaska, and areas along the Atlantic coast to drilling for the first time, which was a bold plan. It was, however, a stupid idea when GW Bush proposed additional drilling in 2008, and at the time a particular Illinois senator called it a capitulation to the oil industry, but no matter.
For those who work in the industry and live and die by drilling contracts, empty promises to develop offshore resources mean nothing when they are accompanied by a consistent full-court press of government interference in offshore oil and gas production. It’s going to be a long election year.
