American Energy Security & Consumer Protection

American Energy Security & Consumer Protection

The current energy situation is completely unacceptable.  Here on Long Island, we are all feeling the sting of our nation’s energy crisis.  It is becoming harder and harder for middle class families to fill our cars with gas or pay to heat and cool our homes, and we are spending more money then ever before to do so.  There is no question that Americans are in need of a comprehensive, long term solution that will ultimately reduce energy prices. 

On September 16, 2008, the House passed H.R. 6899, the Comprehensive American Energy Security & Consumer Protection Act.  This legislation takes the first step towards reducing our dependence on foreign oil and increasing our national security.  It launches a clean renewable energy future that creates new American jobs, expands domestic energy supply, including offshore drilling, and invests in and builds more efficient vehicles, buildings, homes and infrastructure. 

Comprehensive American Energy Security & Consumer Protection Act: Questions and Answers

Q.  How much domestic production of oil and gas is there in the bill? Isn’t most of offshore oil within 50 miles of shore, and so the bill will not lead to a significant increase in domestic production? Does the Democratic bill permanently lock up from drilling 80% of OCS?

A.  The offshore drilling provisions would result in 85% of the total oil available on the Outer Continental Shelf being open for leasing.  It would expand oil available by at least 2 billion barrels of oil – nearly four years worth of the oil produced offshore in America and enough to power 1 million cars for 60 years.  It also makes available enough natural gas to heat 6 million homes for over 42 years. 

The bill opens up at least 319 million acres so that 61% of the Outer Continental Shelf in the lower 48 states would be open to exploration – and that could climb to 73 percent depending on what states decide. It goes beyond the bipartisan compromise proposal in the Senate – opening up the West Coast and Northeast to drilling.

Right now a majority of the oil available on the Outer Continental Shelf is already open for leasing—but the oil companies haven't decided it’s worth their money to drill there.  Through this compromise, we will expand on oil production offshore, while protecting American taxpayers’ interest in American resources and setting forth a reasonable buffer zone.  Republicans would simply allow more drilling without requiring oil companies to pay royalties owed to the American taxpayers and ending tax subsidies for drilling.

On land, the bill will increase domestic oil production in Alaska by mandating annual lease sales in the National Petroleum Reserve in Alaska, which has more than 10 billion barrels of oil -- more oil than the Arctic Wildlife Refuge. 

Further, it strengthens ‘due diligence’ requirements to ensure that oil companies produce oil and gas on federal lands they control. Currently, companies are only drilling on about 6 percent of their leases. 

Q.  Why doesn’t the bill give states a share of the royalties for offshore drilling?  Won’t that mean that states will reject the option of drilling 50-100 miles off their coasts?

A.  States have a serious incentive to opt in for drilling 50-100 miles off their coast.  Energy production can create good jobs and strengthen local economies -- just ask Texas, Alabama, Mississippi, and Louisiana.  More than 30,000 jobs are directly related to Gulf energy exploration and production, and the oil and gas industry accounts for more than 1.7 million jobs in those states, making up more than 10 percent of the state’s employment for Louisiana and Texas.  The 3,800 oil rigs off their coast are a crucial part of their economy both creating jobs and bolstering state revenue. 

Including state incentives would increase the already huge budget deficit created by the Bush Administration by $40 billion over a decade -- once fully phased in.

The Outer Continental Shelf has always been considered a national resource, with revenues used for national purposes and not shared with states.  While Louisiana and the other Gulf States share in oil and gas royalties from the 2006 law – that was a special exception, developed after Hurricane Katrina, and in Louisiana those royalties are reserved for wetlands restoration critical to reducing the damage from future hurricanes. 

Q.  How can it be comprehensive legislation without addressing nuclear?

A.  This legislation dramatically boosts clean, renewable American energy, dramatically increases access to domestic oil and gas supply, dramatically improves the efficiency of buildings and homes (which use 48% of our nation’s energy), and finally makes oil companies pay their share of this critical transition.  The elements of this bill have broad enough agreement in Congress to become law.

Q.  How can it be comprehensive legislation without making clean coal part of the solution?

A.  Carbon capture and sequestration development and deployment incentives are part of this legislation to find and employ cleaner ways to use coal.

Q.  Won’t this legislation be called an enormous tax increase?

A.  At the heart of this legislation is an enormous tax cut for clean, renewable American energy, to help an industry that will create millions of new jobs get up and running.  The repeal of unnecessary subsidies to oil companies earning record profits—in ExxonMobil’s case the largest corporate profit in American history—is a no-brainer.  American energy policy must shift to cleaner and renewable sources and more efficient technology.  And that shift must not increase our deficit and pass another problem onto future generations.

Q.  Doesn’t mandating a renewable electricity standard just increase costs to consumers?

A.  A national Renewable Electricity Standard that 15% of our electricity must come from renewable sources by 2020 will lower energy prices, saving consumers $13-18 billion cumulatively by 2020.  More than half of the States have already adopted renewable electricity standards.  A national Renewable Electricity Standard that 15% of our electricity must come from renewable sources by 2020 will lower energy prices, saving consumers $13-18 billion cumulatively by 2020.  It permits utilities to meet up to 4 percent of their target through energy efficiency.  It will help create new, sustainable, high-skilled American jobs.  And the reduction of carbon emissions is critically important to the global economy facing a range of cataclysmic consequences from global warming.

Q. How can this bill expand domestic supply without helping build new oil refineries?

A. American refineries are currently operating at 78% of capacity, and oil companies are earning record profits.  Oil companies have already expanded the refining capacity of existing refineries.  If more refineries are needed to bring their product to market, they will build them.

Q.  What happens when the offshore drilling moratorium ends?

A.  On September 30, land three miles offshore and beyond will become available for leasing for drilling in states currently covered by the moratorium.  President Bush has overturned 30 years of offshore protections for our beaches and coastal industries, such as tourism and fishing.  So Congress must act soon on a reasonable and responsible compromise that balances our energy needs with the economic needs of our coastal economies.  

In return for opening more areas for drilling, our bill requires oil companies to pay the royalties they already owe to the American taxpayers for deepwater leases in the Gulf of Mexico, and ends subsidies to oil companies for drilling to help our transition to a clean renewable American energy future.

Q.  In regards to offshore drilling, why are the Gulf of Mexico and Georges Bank, in New England, exempt?

A.   In 2006, the Republican Congress enacted a controversial new law that offered new leases in parts of the Eastern Gulf of Mexico (Lease Sale 181 Area and 181 South Area) that are closer to the Florida shore than any previous leases.  In return, the law placed the rest of the Eastern Gulf under moratorium until 2022.  This bill maintains that compromise struck in order to protect the military areas off the coast of Florida, as well as the tourism and fishing industries.

The Georges Bank region off the coast of New England supports the most valuable fishery in the United States, but the fishery is already on the brink of collapse due to other pressures.  This small exemption only affects 8.2 million acres -- 1.5 percent of the area (100 miles or more) that would be opened under the proposed legislation -- leaving plenty of offshore lands available for drilling in the Northeast.  It is critical for an economic recovery of New England for this small piece of New England’s natural environment and economy to be exempt from oil and gas drilling.