The sources for this article are Townhall.com and the New York Times. President Obama announced today that he is opening up much of the east coast of the United States and some of Alaska to oil and natural gas drilling.
According to the New York TImes:
"The proposal -- a compromise that will please oil companies and domestic drilling advocates but anger some residents of affected states and many environmental organizations -- would end a longstanding moratorium on oil exploration along the East Coast from the northern tip of Delaware to the central coast of Florida, covering 167 million acres of ocean."
In theory, I think this is a fantastic idea, but I will admit that I am a little skeptical. This announcement comes just as the President is ready to attempt to push 'Cap and Trade' legislation through Congress. The article in the New York Times points out that:
"...Interior Department will spend several years conducting geologic and environmental studies along the rest of the southern and central Atlantic Seaboard. If a tract is deemed suitable for development, it is listed for sale in a competitive bidding system. The next lease sales -- if any are authorized by the Interior Department -- would not be held before 2012."
This is a very interesting move on the part of the President. In Virginia, the first sale of an oil lease could occur as early as next year as that land had already been approved, but the lease sale was held up by a court challenge and Interior Department review. Keep in mind that Virginia just voted in a Republican governor. Offshore drilling will increase jobs and revenue in Virginia and might put the state back in the Democrat column.
This is a story I will be watching. Opening up offshore drilling would be wonderful for America in two ways--our dependence on foreign oil is a national security issue (Iran has threatened to close the Strait of Hormuz more than once) and it is also an economic issue (our balance of trade deficits). Energy independence is a great idea, and biofuels in their present form have not been the answer. I am, however, skeptical about the details of this plan--how high are the taxes on the oil companies that decide to drill going to be (high enough to make it uneconomical to develop the energy?). This is a story we can all watch.
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