Will Oil Drilling Become a Pipe Dream? Fallout from Gulf spill could trigger business fears, suppress recovery

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If President Obama’s Oval Office speech made one thing clear, it is that his administration and the activists who back it view the Gulf oil spill as simply an opportunity to advance their pre-existing agenda — which has nothing to do with cleaning up the Gulf, protecting the fragile coastal environment or fostering the region’s economy.

The Obama administration’s May 27 order to stop all deep-water exploratory drilling in U.S. waters of the Gulf of Mexico for six months, pending the report of a commission investigating the causes of BP’s Deepwater Horizon accident, is a case in point.

Public and political reaction to the devastating oil release in the Gulf has revitalized a coalition of environmental and anti-energy lobbies that oppose not only deep-water drilling, but all offshore oil production and, in some cases, all use of fossil fuels. As usual, political opportunists have been quick to seize the moment.

“You don’t want to let a good crisis get away,” declares Athan Manuel, director of lands protection in the Sierra Club’s legislative office. The organization is urging a permanent moratorium on new offshore drilling.

Kieran Suckling, executive director of the Center for Biological Diversity, disputes industry claims that shallow-water drilling is much safer than deep-water drilling. The center wants the existing six-month moratorium extended to all offshore drilling.

Such lobbying already has born fruit. On June 8, the administration issued new safety standards for shallow-water drilling. According to Bloomberg BusinessWeek, “as many as 50 shallow-water drilling rigs that employ about 5,000 workers may need new permits in the next six weeks under the administration’s new review.”

According to Vikki Spruill, president and chief executive of the Ocean Conservancy, Mr. Obama’s moratorium is merely the beginning: “the first step needed in broader reform of a broken system.”

Lexi Shultz of the Union of Concerned Scientists believes that the BP accident, along with the recent deadly explosion in a West Virginia coal mine, has “shifted the [political] ground,” putting opponents of oil, gas and coal production in much stronger position to obtain government restrictions on such forms of energy production.

Members of Congress already have held hearings on the BP disaster in the Gulf, and many more will follow as grandstanding legislators seek the publicity and positioning such high-profile events make possible. New laws and regulations are virtually certain to result from the hasty legislative activity. No one knows what the legal and regulatory situation will be a year from now.

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Robert Higgs [send him mail] is senior fellow in political economy at the Independent Institute and editor of The Independent Review. He is also a columnist for LewRockwell.com. His most recent book is Neither Liberty Nor Safety: Fear, Ideology, and the Growth of Government. He is also the author of Depression, War, and Cold War: Studies in Political Economy, Resurgence of the Warfare State: The Crisis Since 9/11 and Against Leviathan: Government Power and a Free Society.

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