Show Me The Money! Drilling Back in Play

What a difference a year and a half (and a failed special election) makes! Arnold Schwarzenegger, who in January of last year was lambasting the notion of offshore drilling, is changing his tune.

With legislators in Sacramento now reduced to looking for loose change under the sofa cushions, budget cuts that were once unimaginable are now in play and just about any revenue generator will receive legitimate consideration-- even offshore drilling.

Last week Arnold floated a plan to "unblock" the on-again, off-again offshore drilling proposal at Tranquillon Ridge in Santa Barbara. Essentially, the Governor is seeking to give the Department of Finance the ability to overrule the State Lands Commission, which put the kaibosh on the project earlier this year.

The projected revenue to the state is $1.8 billion. That must sound pretty good if you are a legislator tasked with closing a $20+ billion budget hole, but when you consider that number is spread out over 14 years with $100 million up front, it becomes somewhat less impressive. However, Sacramento has proven adept at borrowing against future revenues in the past (think tobacco settlement money) so maybe this is something that elected officials will want to consider.

The response to the plan has been swift. Last night representatives of the Sierra Club and other environmental interests voiced their opposition at a meeting Santa Monica. No doubt there are a million reasons not to greenlight this project, just as their are legitimate arguments for it.

The $64,000 question (or $21 billion question) is how those conflicting sentiments stack up against each other in the post-special-election climate?