In a move that means nothing without follow-on congressional action, President Bush announced this afternoon that he was lifting the executive ban on drilling in the US coastal waters in the eastern Gulf and the eastern and western continental shelf areas. Again, with a congressional ban on drilling in place, this order is just half of the action that would need to take place to actually start the ball moving toward allowing exploration in those areas. If congress followed the President’s lead, it would then be up to the states in the areas as to whether or not to allow drilling in those federal waters.

Within hours of Bush’s announcement, House Leader Nancy Pelosi issued this statement, “Once again, the oilman in the White House is echoing the demands of Big Oil. The Bush plan is a hoax. It will neither reduce gas prices nor increase energy independence. It just gives millions more acres to the same companies that are sitting on nearly 68 million acres of public lands and coastal areas. If the President wants to bring down prices in the next two weeks, not the next two decades, he should free our oil by releasing a small portion of the more than 700 million barrels of oil we have put in the Strategic Petroleum Reserve. It’s time to tell the oil industry: ‘You already have millions of acres to drill. Use it or lose it.’”

This talking point by the opponents of opening up the coastal areas and ANWR to drilling - “just gives millions more acres to the same companies that are sitting on nearly 68 million acres of public lands and coastal areas” - reflects either a willful ignorance of the facts of exploring for oil and gas (or which I’m sure the readers of this blog are familiar, but for those not necessarily involved in energy…E&P companies will lease broad areas of acreage in order to perform testing (seismic and otherwise) to determine the potential of that acreage to produce hydrocarbons - if testing indicates it won’t, it won’t be drilled, yet those leases will still be held in the inventory until expiration of the lease term) or it is a cynical attempt by those opponents to mislead the public by plying on their long held distrust of the domestic oil and gas companies. Additionally, the statement implies that opening those areas to exploration is a hand-out to big oil - a statement far removed from reality. Energy companies will pay hundreds of millions, if not billions of dollars for the right to explore in these areas, and if commercial quantities of hydrocarbons are found, will pay about 17%, either in take-in-kind volumes of crude, or in revenues from the sale of those hydrocarbons, to the Minerals Management Service. Certainly not a hand-out.

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