Legislation Mixes Drilling and Plug-In Hybrids

September 20, 2008

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Of course, the oil industry won’t be losing out entirely. The main—and indeed most controversial— provision of the bill is the repeal of a ban on offshore drilling that has existed for nearly three decades. Drilling is still prohibited within 50 miles of American shores, but H.R. 6899 would open up the 50-100 mile zone for exploration and drilling.

It’s estimated that only about 20 percent of American offshore oil reserves lie in this region—and many states have their own prohibitions in place already—so the bill is far from what the oil industry and most Republicans had been seeking. Still, environmentalists fear that this is only the beginning of a massive expansion of domestic drilling. If the recent spike in oil prices opened up the 50-100 mile region, will oil rigs be allowed even closer the next time a shock hits the market?

The Bush administration has promised to veto the bill in its current form, but a Senate version of the bill is likely to differ greatly in an effort to bring together a wider coalition and pressure the President to sign it into law before a possible Obama administration might have the opportunity to enact an even less attractive version.

In related news, General Motors CEO Rick Wagoner was in Washington last week, requesting a $50 billion government backed loan to help American automakers retool their operations toward more fuel efficient—and market competitive—vehicles. Congress isn’t likely to grant the industry the full $50 billion, but if it chooses to heavily subsidize vehicles like the Volt in the future, it will be a major boon for Detroit.

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Posted in Carmakers, Environment, Fuels, Incentives and Laws, Oil Dependence
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  • Samie

    Bush will not veto this if the Senate and the House agree on something. Just political games kind of think of it as a poker game all Bush wants is to have some influence over the final bill. The Greenies will have much of the language in the house version. Don’t be surprised if Hydrogen gets more attention or r&d money is poured into new ways to build nuclear reactors. I also suspect the 50-miles will become 25 and there will be some type of revenue sharing with the States. As for the oil companies giving up all their tax breaks, that will not happen. They may be required to invest in Green tech or only a small amt of tax breaks will be stripped.

    Im sure nobody watched the debate on the House floor like I did, I know thats dorky but it was really funny hearing the logic of those who opposed the bill my fav had to be the oil drummer from Alaska he was really funny to watch :)

  • Shines

    I’m sorry, I am for alternative fuels, but this kind of law is stupid:
    a mandate that would force each gas station to install at least one “alternative fuel pump” by 2018
    who has to pay for this? the independent station owners? I suppose they could just wire an electrical outlet to the outside of the station and say – here’s the alternative – a plug for the plug ins.
    This is just as stupid:
    offers a $50,000 tax credit to stations that choose to install E85 pumps instead

    If congress really believes we are too dependent on foreign oil then tax it – make it more expensive and let the free market decide how to deal with the higher prices, and then you also have the tax money to loan to the big automakers to help them convert to alternative fuel vehicles (If that is determined to be what the market wants).

  • Deranged Stu

    How about mandate gas stations install an electric pump for batteries? They could use their roofs for solar panels to make roughly the same amount of profit as they do now (not much at all).

    Also, even though I do typically side with democrats over many issues, going against offshore drilling is just stupid. There is no argument; it’s only a slippery one. Who’s to say that “if they do this then they will do this”? That’s a dumb argument and whatever helps us pull ourselves out of the Middle East oil market I’m practically all for.

    One more thing, I didn’t respond to the natural gas topic but here goes: Really? I mean seriously drop it. “It’s not the answer but it help for now.” I’m sorry but NO! Why install all of these pumps etc. when we’ll just have to rip them out down the road sooner than later? I say bring on the electric cars and let the power plants make the power; that’s what they do and they are better and more efficient at it than a compact mechanical engine (weight).

    Bring on the Chevy Volt! Finally something GM seems to be doing right!

  • Giant

    @Deranged Stu
    So you wanna drill. I don’t know what the reserves are off-shore, but from what I have read on ANWR, there’s enough there for about 1 year at today’s US consumption. I sort of think we need to save that precious natural resource for the next generation (or the next etc etc).

    It is time for more drastic action.

  • Deranged Stu

    @Giant
    What exactly are you saving these reserves for? Hopefully if things go right we won’t need oil either way. I know people think of offshore drilling as too big of an answer but honestly if it helps for more positive legislation to be passed I’m for it.

    I also agree it’s time for more drastic action.

  • Need2Change

    Let me be perfectly clear — I hate the Oil companies and the way the Republicans helped the US consume too much oil. And I hate the profits that the oil companies now earn.

    But we have an energy problem that needs to be solved, and it seems like energy companies should help solve the problem.

    The tax credits had a function — mostly to encourage greater oil production in the U.S. Taking away the credits,increases the reliance on foreign oil. I don’t think we want to do this.

    It seems like we should be working with the energy companies to solve the energy problem (even if they are the devil), and not working against them.
    .

  • Bryce

    Bring on the electric car pumps. : ) O I can’t wait.

  • Tom

    Deranged Stu

    “the stone age did not end because we ran out of stones”

    The point is humans discovered iron steel aluminum cement and could construct better structures(ancient Greek structures notwithstanding) , even though there were still plenty of stones on the ground.

    I am not naive enough to think that we will leave oil in the ground ,Big Oil just can make too much money off of us.

    If we can produce enough solar to power our electric cars and there is a carbon tax making it cost prohibitive for coal and oil to be burned, maybe just maybe….

  • Paul Beerkens

    Most pesticides and fertilizers are made of oil. We need these to maintain the current food yields. Let’s save the oil for that.

    There is absolutely no point in spending our energy and money on drilling for more oil right now if that means that we are going to neglect looking for alternatives.

  • Peter

    Need2Change said, “But we have an energy problem that needs to be solved…”

    I couldn’t disagree more. There is no shortage of oil on the market. Americans are not entitled to free, or almost free, energy. Energy is just finally being priced by the market at a reasonable level. If people refused to drive automobiles that averaged 25mpg and insulated their homes we would not be complaining about energy prices.

    This “energy problem” is a ploy to encourage continued, wasteful consumption and record profits for the energy companies.

  • Brian in Highland

    Oh, yea thats it, another plan to bail out american auto companies who have sat on their hands for years and fallen behind our to sheer arogance. Yes, lets give them more help, this is exactly what they have been waiting for. The free government bail out program. Put it right up there with saving the airlines everytime they get in a bit o a spot. Oh, and lets save Amtrak again. How about something useful like use the money to provide tax breaks for americans buying hybrids or other fuel efficient cars, and taxing the crap out of the fuel guzzling SUV’s.

  • sean t

    To do all or most of the above, we may have to ban the donations from oil/car/whatever companies to the political parties?

  • Rei

    The EV/PHEV credits section is a disaster to those who are interested in hyperefficient three wheelers, such as the Aptera Typ-1 or the VentureOne. Despite them having normal car safety features, they’re deliberately excluded from the bill, which explicitly states that to get the credit, the vehicle must have four wheels. This is going to be a huge blow to those manufacturers if it passes.