American Power and Offshore DrillingMay 12, 2010 - by Donny Shaw
Sen. John Kerry [D, MA] and Sen. Joseph Lieber man [I, CT] today unveiled details of their long-awaited American Power Act, which is a comprehensive bill designed to deal with the issues of climate change and energy independence. It’s a draft right now, so we don’t have it up on OpenCongress. As soon as we do, we’ll be doing some more deep analysis of its provisions. But for now, it wanted to pass along some info on what the bill proposes for the energy topic du jour — offshore drilling.
Even with the BP oil spill escalating in the Gulf of Mexico, expanded offshore drilling is seen as an essential element for winning the support of key Senate conservatives. But, in light of the spill, Kerry and Lieberman had to scale back their offshore drilling provisions a bit to reflect the broader growing skepticism of offshore drilling among liberals. Brad Plumer of TNR describes the compromise they ended up going with:
Here’s how the bill would work. Let’s say South Carolina wants to open up its coastal waters—we’re talking the area 3 to 75 miles out—to gas and oil exploration. If it did so, 37.5 percent of the revenue from the leases would go to the state, and 12.5 percent would go to conservation programs. The rest would go to the federal government, as usual. This is the infamous “revenue sharing” idea that’s so important to folks like Graham and Landrieu (and opposed by inland senators like Jeff Bingaman, who want all the money to go to the federal government, as it does now). So South Carolina has a fair bit of incentive to allow new drilling.
But there’s a twist. Let’s say Florida is worried that potential oil spills off South Carolina could sully its beaches. Here’s what would happen: First, the Interior Department would conduct a study to see whether Florida would be affected by any potential spills. If so, then the Florida legislature could pass a law vetoing the new drilling and South Carolina would have to comply. Likewise, Maryland could veto Virginia—heck, if New Jersey found that it might be affected by a Mississippi spill (unlikely, but I guess it’s always possible), then it could veto Mississippi.
The bill text spells out exactly what the Interior Department should take into account when they try to decide whether one state’s drilling plans would “significantly impact” another state (from page 74 of the draft .pdf):
(h) IMPACT STUDIES.—
(1) IN GENERAL.—If a 5-year plan developed
by the Secretary pursuant to section 18 includes an area off the coastline of a State that is eligible to receive revenue sharing under this Act, the Secretary, in consultation with relevant agencies, shall prepare an assessment of—
(A) the probability of an oil spill occurring in the designated area, taking into consideration—
(i) the anticipated volume of oil within the area;
(ii) the location of planned exploration and drilling activities in the area; and
(iii) local tides, currents, winds, and weather patterns and events (such as hurricanes) that may affect the area; "(B) the potential environmental impact on the coastline of the State of an oil spill resulting from drilling activities within the area identified in the 5-year plan;
(C ) the potential impact on the coastal economy of the State, including public and private infrastructure, tourism, commercial and recreational fishing and boating, and other forms of coastal recreation, of an oil spill resulting from drilling activities within the area identified in the 5-year plan;
(D) the potential impact on the coastal economy of any other States that the assessment identifies would be directly impacted by an oil spill resulting from drilling activities within the area identified in the 5-year plan, including impacts on the public and private infrastructure, tourism, commercial and recreational fishing and boating, and other forms of coastal recreation of 1 or more States; and
(E) the potential impact on any military operations in the coastal area of an oil spill resulting from drilling activities within the area identified in the 5-year plan.
Plumer suspects this will mean very little new drilling:
Realistically, if any potentially affected state can veto new drilling, then it’s unlikely that there will actually be much new offshore drilling. Alaska will undoubtedly start opening up some new waters—since an oil spill there won’t affect any other state. And it’s possible that South Carolina might open up some areas as long as Florida (which will almost certainly get a veto) has a pro-drilling Republican governor in office. But other than that? As best I can tell from talking to informed observers, it’s not likely we’ll see much new offshore drilling if this is the system.