End of an Era: Offshore Drilling Ban to Expire

At midnight on Tuesday, September 30th, the federal moratorium on drilling in the Outer Continental Shelf (OCS) will be no more.  The OCS drilling ban, renewed every year by Congress since its enactment in 1981, will be allowed to lapse.  The action becomes final with the passage of a $600 billion continuing resolution, which President Bush is expected to sign, that for the first time in 27 years is missing language to extend the annual ban.

This important coastal protection had withstood every effort to repeal it over the years but withered for lack of political will in the face of high gas prices.  The oil companies finally achieved success by pouring hundreds of millions of dollars into a PR-fueled lobby blitz that saw members of both parties in Congress exploiting the "drill, baby, drill" mantra.  People fed up with $4/gallon gas wanted action - any action! - and so they were hoodwinked by snake-oil peddling and political pandering. 

Sadly, many elected officials who get that drilling won't lower prices at the pump or put a dent in our country's oil dependence nevertheless were unable to stop Big Oil and its friends in Congress.  And in this election year, President Bush's threatened veto of a federal spending bill authorizing renewal of the drilling ban made the risk of a government shutdown too great for the Democrats to ignore.

So what happens now?  With the expiration of the OCS moratorium, new drill rigs could be placed only three miles from the shoreline anywhere on the entire Atlantic and Pacific coast, as well as a part of the eastern Gulf of Mexico.  (However, leasing will remain banned within 125 miles or more of Florida's gulf shores until 2022, per a compromise law passed in 2006 that opened more than 8 million acres of the gulf acreage to new leasing in exchange for bigger shore buffer protection.) 

The first question is whether any coastal states will let that happen.  No doubt some, like Louisiana and Texas, would welcome more rigs but others, like Florida and New Jersey, would surely use any legal means at their disposal to protect their beaches and coastal economies.

Then there's the typical bureaucratic process for leasing federal areas for drilling, which realistically means that the first exploratory drilling rigs wouldn't be up until five years from now at the earliest.  That is, unless the new president or a new Congress decided to reinstate either the executive or congressional OCS moratoriums - or both.

So the oil industry may have won the fight, but the war over offshore drilling is far from over. Stay tuned.