Issue Position: Energy - OCS Drilling

Issue Position

Issue Position: Energy - OCS Drilling

H.R. 6899, the Comprehensive American Energy Security and Consumer Protection Act (the "Democrat Energy Bill")

Status update: As of October 1, 2008, the ban on drilling in the OCS has expired. Therefore, there are now no restrictions on drilling offshore unless Congress or the President put new restrictions on. The bill described below has passed the House, but not the Senate and is not law.

Adopted by House on September 16, 2008, by a vote of 236 to 189

Inglis Vote: "Aye"

Summary

"The House bill is the product of weeks of negotiation and partisan disputes over energy policy."

"It would allow drilling beyond 100 miles off U.S. shores and give states the option of allowing production beyond 50 miles offshore."

"The legislation would use new oil and gas royalties to offset the cost of incentives designed to promote energy efficiency, renewable energy, or carbon capture and sequestration. It would require utilities to generate 15 percent of their energy from renewable sources by 2020.

"The bill also would extend tax credits for wind and solar energy. It includes new tax breaks for coal projects that capture carbon, fueling stations for natural-gas vehicles and energy conservation. Spending on these provisions would be offset by rolling back tax subsidies for oil companies.

"The bill would establish new ethics requirements for the Minerals Management Service, a division of the Department of the Interior that oversees the leasing program."

- Source: Democrats' Drilling Bill Passes in CQ Weekly, Sept. 22, 2008, pg 2506

Pro

When folks are coming your way, reward them.

The best argument for the Democrat Energy Bill was this: Democrats were taking small steps toward an American energy solution by permitting some offshore drilling (which Inglis favors) and by providing incentives for fuels of the future (Inglis' highest legislative priority).

Increased OCS Drilling

o 0-50 miles (oil & gas): Continued legislative ban on drilling

o 50-100 miles (oil & gas): Drilling permitted if state "opts in" (but no sharing of revenue with states)

o 100-200 miles (oil & gas): Open to drilling (with no sharing of revenue with states)

Oil Shale

* Repeals Udall amendment to block oil shale and replaces it with a requirement that the state approve.

Promote Natural Gas, E-85 Infrastructure

· Service stations owned by Big Oil will be required to install at least one "alternative fuel pump" (E-85 or Compressed Natural Gas/Liquefied Natural Gas)

Carbon Capture and Sequestration- Research & Development funding.

Renewable Energy and Efficiency Tax Incentives.

Extends and expands tax incentives for renewable energy, including incentives for plug-in vehicles, energy efficient homes, buildings, and appliances for 1 year (wind) or 2 years (everything else). These are the credits that have helped to grow the wind energy business at General Electric's Garlington Road plant in Greenville, SC.

Con

Don't let folks find cover in a less than a full solution

The best argument against the Democrat Energy Bill was this: Don't reward people until they have come all the way to the full solution that you want.

· Inglis voted in favor of the Republican motion to recommit which came up for a vote right before the vote on final passage of the Democrat Energy Bill. That motion failed by a vote of 191 to 226. Had it passed, the text of the Democrat Energy Bill would have been replaced by the bipartisan H.R. 6709, the National Conservation, Environment, and Energy Independence Act (Rep. John Peterson R-PA and Neil Abercrombie D-HI).

· The Republican Motion to Recommit would have:

· Opened up more of the OCS for drilling

· 0-25 miles (oil & gas): Continued legislative ban on drilling

· 25-50 miles (oil & gas): Drilling permitted unless a state "opts out" (with 30% sharing of revenue with states)

· 50-200 miles (oil & gas): Open to drilling (with no sharing of revenue with states)

· Extended Renewable Production Tax Credits, including wind, by 5 years rather than 1;

· Extended other renewable and energy efficiency credits, including solar and fuel cells, by 2-8 years; and created new plug-in hybrid credit.

· Most Republicans felt we should insist on this position and not move towards the Democrat bill.

· Many Republicans also objected to the following provisions of the Democrat Energy Bill:

· Revenue Hikes. Bill takes away the Section 199 manufacturing deduction for oil and natural gas production from big five oil producers.

· Interference with Strategic Petroleum Reserve. Temporarily releases nearly 10 percent of the oil from the SPR, and replaces it within 5 years with heavier, cheaper crude oil.

Inglis Position

Breaking free of oil is my highest legislative priority. We need to get more oil for the near term, and that's why I'm in favor of offshore drilling. But we must not stop there.

Offshore drilling may replace declining production from existing American wells, but it will not solve our problem. A country with 3% of the world's known oil reserves that currently supplies 10% of the world's oil (we're sucking our straw pretty hard) but uses 25% of the world's total oil production (that's why we import so much) cannot drill it's way to energy freedom. Even if oil shale and future oil discoveries offshore and elsewhere were to double our share of the world's known oil reserves (taking us from 3% to 6%), OPEC will still be the cartel with 70% of the world's known oil reserves.

OPEC's oil is most often near the surface and easily extracted. Valued at, say, $100 per barrel, OPEC has $92 trillion of inventory beneath their dirt. That gives them the ability to buy Bank of America with 2 months of revenue, Apple Computer Company with 2 weeks of revenue and General Motors with 6 days of revenue. Just as we wouldn't challenge Tiger Woods to a golf match, we've got to stop playing this oil game on the sands of the Middle East.

Our oil addiction is incredibly dangerous. Breaking free provides an equally incredible opportunity. By doing what Americans do best—innovating—we can win the triple play of this American century. We can:

(1) improve the national security of the United States

(2) clean up the air

(3) create jobs in places like South Carolina.

The road to energy independence runs through South Carolina. Because of BMW, Michelin and Timken, we've got Clemson University's International Center for Automotive Research in Greenville. We've got the Fuel Cell Center at USC. We've got the Clyburn Center for Transportation Research at South Carolina State. And we've got the highest concentration of hydrogen scientists in the world at Savannah River National Lab.

Because energy security is my highest legislative priority I voted for the Democrat Energy Bill. I'd reward any one—Republican, Democrat or Independent— any day for taking any steps (no matter how small) to reenergize freedom. It's that important.

Source