One year ago today President Obama imposed a moratorium on offshore drilling in the Gulf of Mexico. It banned shallow-water and deepwater operations, setting the stage for a year of delays in permitting. Now a U.S. senator wants to put a moratorium on federal agencies.
Sen. David Vitter (D-La.), an outspoken critic of the administration’s anti-drilling policies, introduced the Agency Overreach Moratorium Act, which would require congressional approval for federal regulations that restrict energy exploration on federal lands and offshore.
Vitter said the legislation would expand domestic energy resources and produce much-needed revenue for the federal treasury at a time of skyrocketing deficits.
“The moratorium was one of the most poorly thought out, mismanaged and ill-conceived policy decisions regarding domestic energy production in the history of this country,” Vitter said. “Look no further than $3.98 per gallon of gas or the seven rigs that have left the Gulf and five that are not working to see how damaging the moratorium has been to our economy.”
One of the real-life consequences of Obama’s moratorium is the bankruptcy of Seahawk Drilling. Randall Stilley, president and chief executive, shared the sad story of his company’s demise in a video produced by Heritage and the Institute for Energy Research.
Lawmakers, meanwhile, have seized on the drilling delays to advance legislation. Yesterday the U.S. House passed a bill to require lease sales in the Gulf of Mexico and off the coast of Virginia. Two other energy bills are on tap for the House next week.
The flurry of activity on Capitol Hill comes as the price of crude oil dropped sharply Thursday, closing at $99.06, down $10.19 from its recent high. The wake-up call on Wall Street put an end to speculation about a Suez Canal crisis or a political domino effect across the Middle East.
The decline in oil prices may be in anticipation of a more dramatic fall in commodities prices across the board. While it remains uncertain how long this sell-off will last, the market appears to be undergoing a dramatic reevaluation.
But until gas prices retreat from their nearly $4-per-gallon average, lawmakers are likely to continue pursuing energy legislation. Vitter, for example, has also introduced the 3-D Act: The Domestic Jobs, Domestic Energy, and Deficit Reduction Act, which he estimates would create more than 2 million jobs, $10 trillion in economic activity and $2 trillion in federal tax receipts.
The House Republican Study Committee, meanwhile, unveiled a new plan Thursday called the Consumer Relief for Pain at the Pump Act. It seeks to repeal restrictive energy development policies and mandates that increase the cost of gasoline. It would also end frivolous litigation and reduce regulatory delays that hamper energy production.
Democrats have also come to the table with their own plans. Senate Finance Chairman Max Baucus (D-MT) unveiled a plan this week to significantly raise taxes on U.S. oil and gas companies while also using taxpayer money to pursue fuel-efficient and alternative-fuel vehicles.
Samir Kapadia contributed to this report.