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The White House, Big Oil, and the "American Power Act"

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Michael Collins

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This analysis looks behind the scenes at how the ban on offshore drilling was lifted and what that had to do with the ultimate prize for big oil, the American Power Act. It focuses on the current administration. That in no way implies that the problem originated in January 2009. The out sized and destructive influence of the oil monopoly has been with us for since the 1870's.

Banning Offshore Drilling

In 1969 a Unocal oil rig off the coast of Santa Barbara, California began leaking oil. The extent of the leak, damage to wildlife, and the shoreline caused considerable outrage. The state of California banned offshore drilling shortly after the leak. In 1980, Congress banned offshore drilling in most federally controlled waters. President George H.W. Bush reluctantly banned off shore drilling in 1990 for California, Florida, Oregon and Washington and in the North Atlantic.

Lifting that ban has been a top priority for oil companies in the United States. In 2006, the U.S. House of Representatives voted to lift the ban on offshore drilling for 85% of the nation's shoreline. The Senate failed to cooperate. Just before leaving office, President George W. Bush lifted the executive order banning offshore drilling and challenged Congress to complete the process with legislation. No action was taken.

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It took a Democratic President to change the decade's long policy. On March 31, President Obama lifted the ban on offshore drilling covering 85% of the nation's shoreline. The Gulf of Mexico coastline, location of the BP catastrophe, had not been included in the original ban.

Obama's Very Bad Timing

The president had the worst timing imaginable for this announcement. Just 22 days later, BP's Deepwater Horizon rig off the Louisiana coast failed miserably and has been leaking ever since. Obama's remarks at the March 31 announcement came back to haunt him even though the offshore drilling by BP and the others in the Gulf of Mexico had been in place for years.

Obama stressed that great care would be taken to protect the environment.

"So today we're announcing the expansion of offshore oil and gas exploration, but in ways that balance the need to harness domestic energy resources and the need to protect America's natural resources. Under the leadership of Secretary Salazar, we'll employ new technologies that reduce the impact of oil exploration. We'll protect areas that are vital to tourism, the environment, and our national security. And we'll be guided not by political ideology, but by scientific evidence." Pres. Barack Obama, March 31

It didn't take long after the BP disaster to see how safe the environment would be under the guidance of Salazar's Department of the Interior. The failed BP site had been lightly regulated, a direct cause of the massive leak. From April 20th to the present, at least 27 deepwater offshore leases were granted by the federal government. Like BP's failed site, these approvals were granted with special dispensations to avoid full environmental impact statements.

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While he didn't grant BP's failed drilling permit, Obama and his administration approved others with the same lax considerations for safety and the environment.

Why Lift the Offshore Ban? Why the Flood of Offshore Leases?

Lifting the ban on offshore drilling was a calculated risk to get the Kerry-Lieberman American Power Act passed in the Senate. The bill is a plan to replace previous environmental legislation referred to as cap and trade, aimed at reducing carbon emissions. In order to get new programs for carbon alternatives, including nuclear power, we're told that the administration had to give-in to offshore drilling requests, particularly at deepwater depths, grater than 5,000 feet.

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