Tuesday, July 15, 2008

Battle Lines Being Drawn Over Offshore Drilling

With President Bush's decision yesterday to rescind the executive order banning offshore oil drilling, the debate in California is heating up. For days, Gov. Schwarzenegger has been vocally opposed to any new offshore drilling California, stating bluntly that commencing new operations now will have no immediate impact on the price of gasoline at the pump (which is currently falling in California).

Writing in today's California Progress Report Assembly Member Pedro Nava picks up the Governor's opposition and notes that, for more than a decade, we have been bringing more supply online and prices have still gone up:

"Despite having more than doubled the amount of producing oil wells over the last 15 years, gas prices have nearly quadrupled. Since 1994 the amount of wells drilled in U.S. Territory has increased from over 3,000 wells to nearly 9,000 wells. Meanwhile the average price of gas at the pump has risen from just over $1.00 to over $4.00."

(Nava makes no mention of increased demand possibly off-setting those supply increases.)

He also claims that drilling will have a negative derivative effect on the state's economy:

"Petroleum development on the outer continental shelf of the West Coast will put important segments of our state’s economy at risk. Recreation and tourism-related activities in California’s coastal counties represent more than $12.5 billion in revenues. California’s fishing and aquaculture industries are estimated to contribute an additional $400 million to the state’s economy. Why should we put valuable natural resources at risk for a miniscule benefit that wouldn’t materialize for more 20 years?"

Nava has introduced a Resolution expressing opposition to drilling, but he points out that Congress appears to be favorably inclined to backing the President's call for more drilling. Ultimately, though the State of California will be the final arbiter and it would certainly appear that there is firm resolve in Sacramento to hold the line against drilling.