EPA is Obama’s Offshore Drilling Ace in the Hole

By Dr. Michael Economides

The best strategy in poker involves tricking your opponent into thinking they have the upper hand, while secretly maintaining an advantage. Recent statements from the White House indicate its political strategy on energy employs a similar variety of sharking.

This political card game began last week with the announcement of a badly needed update to America’s plan for accessing the vast oil and natural gas reserves in the Outer Continental Shelf (OCS). Such action is a strong step in the right direction in ensuring America’s energy security, and relieving stress on global energy markets. But it’s important to recognize that this announcement is just a single move in a much larger game.

The administration’s concessions on offshore access represent a clear quid pro quo strategy designed to secure Republican support for a climate bill to pass through Congress in 2010. And taken at face value, increased OCS access appears to be a significant compromise coming from those who oppose continued use of traditional energy supplies. Like any good gambler though, opponents of this critical resource development have an ace in the hole.

These perceived concessions made on the part of the Obama administration are at the mercy of the Environmental Protection Agency. The president could later use his bureaucratic reach to delay and even negate these concessions, making his “policy shift” all smoke and mirrors. The agency has to date, demonstrated an aggressive desire to move forward with regulatory limits on carbon dioxide emissions, despite Administrator Lisa Jackson’s public statements about her preference for a legislative solution. There is nothing to suggest that we will not see a similar tactic used to delay drilling indefinitely.

President Obama has made clear that he will pursue drastic emissions reductions that will greatly limit America’s ability to use fossil fuel resources of any kind. In fact, the administration’s current emissions goals of 83% below 2005 levels by 2050 will limit fossil fuel usage to 10% of the national energy mix by 2050. To put this in perspective, the U.S. currently relies on fossil fuels for over 86% of our energy needs.

What’s more, current regulatory requirements for exploration and production in U.S. waters are very stringent. This insures that drilling occurs in a safe and responsible manner, and that spills resulting from drilling are uncommon, if not entirely unheard of here. An environmental study is required to establish what the impact of drilling will be on the local ecosystem. This assessment can take years. And should the findings be significant, the drilling may not occur at all. While these studies are occurring, the U.S. will not see one drop of oil come out of any of these wells. Such draconian policies will inevitably stifle American growth and ignore the complex realities of the worlds growing energy demand.

The combination of an endless wait for offshore drilling and severe rules that limit our ability to use these resources make it clear that current energy policy is an attempt by opponents of energy resource development to concede little now, for great political gains down the road. Such a strategy will inevitably contribute to skyrocketing energy prices, erode U.S. energy security and force an unnecessarily complicated and costly transition to newer technologies that have not been fully developed.

“Giving” offshore drilling to advocates of expanded OCS access is no bargain if the concession is never realized. While many will claim this is a short term victory for advocates of expanded domestic production, it won’t take long for this house of cards to fall.

Michael J. Economides, Editor-in-Chief of Energy Tribune, is a leading energy analyst, consultant, educator, petroleum engineer, and author.

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