Last month, I criticized two presidential candidates for proposing a moratorium on the 18-cent per gallon federal gas tax and 24-cent per gallon tax on diesel. Presumed Republican candidate John McCain and former Democratic candidate Hillary Rodham Clinton both proposed a moratorium as some sort of relief for the summer vacation season; presumed Democratic candidate Barack Obama called it "pandering." President Bush's proposal to remove the 27-year old moratorium on offshore drilling isn't pandering, strictly speaking, but promoted as relief from $4 to $5 gasoline, it's just as specious.
"If Congressional leaders leave for the Fourth of July recess without taking action, they will need to explain why $4-a-gallon gasoline is not enough incentive for them to act," Bush said -- okay, there's the pandering -- Wednesday in the Rose Garden. If you believe he wants this for you, and not for his friends in the oil industry and at Vice President Cheney's former employer, Halliburton, you ought to take a closer look.
Bush blames the Democratic-led congress for not taking action, even though a Republican majority for his first six years in office also failed to remove the ban, which took effect during the Reagan administration. That 1981 ban was under a Democratic-led congress, but President Bush, senior, signed an executive order reinforcing the ban in 1990. And Jeb Bush opposed lifting the ban when he was Florida's governor. Oil is thicker than blood.
Next step in the president's efforts to help as many of his friends as possible in his remaining half-year is ANWR, in Alaska. Nevertheless, neither drilling in Alaska nor drilling offshore would produce any oil for years to come.
I'll bet you a share of ExxonMobil, the world's most profitable corporation, that more domestic oil production won't significantly, or permanently, lower our gasoline and diesel prices. The Organization of Petroleum Exporting Countries has set prices for decades. And ExxonMobil, which is getting out of the much less lucrative retail side of the business, has a profit record to break.
As David Sandalow of the Brookings Institution puts it, "The price of oil is set on a global market. Oil companies are not going to give U.S. drivers a break on oil found near our coasts. Any impact of offshore drilling on gasoline prices would be small and far in the future." In that future, many of us will be driving plug-in hybrids in our contribution to a 35-mpg Corporate Average Fuel Economy standard.
What's more, The New York Times reports Thursday that there's a shortage of drilling ships. You might assume this is because American oil companies haven't had any reason to invest in them, but the shortage already affects opportunities to drill a very large oil field found 200 miles south of Rio de Janeiro last November. "Energy experts said the field could turn out to be just a small part of the largest oil discovery in 30 years," The Times reports.
Of course, the runup in oil prices is giving the shipbuilding industry incentive to catch up, with prices up by $100 million per ship since last year. "Shipyards from South Korea to Norway are working overtime to meet a huge influx of orders," The Times says. Contrasting with the Brazilian oil discovery, the Energy Information Administration, a federal agency, estimates there are 18-billion barrels of oil in the U.S. area the moratorium covers. Total. While Bush says that's enough to match current U.S. production for a decade, the EIA says it won't affect domestic crude oil and natural gas production or prices before 2030.
The message for drivers is that ending the offshore moratorium or drilling in ANWR won't give us relief from $4-$5 per gallon gas today or tomorrow, if it ever gives us relief at all.