Spill, Baby, Spill: House Transportation Bill Is Another Giveaway to Big Oil

America Already Runs More Drill Rigs than Rest of World Combined

by Kiley Kroh

Today the House Natural Resources Committee will take up a trio of “drill, baby, drill” bills that would partially pay for the House surface transportation reauthorization bill, designed to fund our nation’s programs for trains and automobiles.

As it stands right now, the bill would last four years and cost $260 billion. Unfortunately, the House Republicans’ version of the transportation bill would throw open protected pristine places for dirty petroleum production.  One proposal opens Alaska’s pristine Arctic National Wildlife Refuge to drilling. Another measure opens the Atlantic and Pacific coasts to be drilled and mandates more drilling in the Gulf of Mexico. The third proposal makes available millions of acres in the western U.S. to oil shale development.  Despite Boehner’s characterization of the measure as a “job creation package,” it seems to be little more than another Republican giveaway to Big Oil.

Transportation advocates have sought a long-term reauthorization of highway and transit programs, which currently expire on March 31. Traditionally, improvements to roads, bridges, and public transportation are funded by the federal gasoline tax, but GOP leaders in the House are taking the unprecedented step to tie funding to an unnecessary and ineffective increase in fossil fuel production.  As CAP’s Donna Cooper writes, “Congressional Republicans are making this push so they can block movement to create jobs and rebuild our infrastructure while sounding like they are in favor of policies that do both.” Here are the key reasons this package is no solution to repair our nation’s aging transportation infrastructure.

We’re already running more drill rigs than the rest of the world combined. As of last Friday, there were 2,008 drill rigs operating in the U.S. and 1,862 rigs operating in the rest of the world, according to industry statistics. In 2010, total U.S. production (onshore and offshore) was the highest it has been since 2003.  And the Obama administration’s latest five-year offshore leasing plan already makes more than 75% of recoverable offshore resources available for exploration and development.  Clearly, the number of acres available to be drilled is not the problem.

And despite decades of effort, oil shale has never been shown to be economically viable. In addition, it would consume huge amounts of western water in the Colorado River basin that is already facing predictions of severe and prolonged drought and which is relied upon by more than 25 million people in the southwest.

Oil companies are letting the vast majority of their leases sit idle. A Department of Interior report released last year found that more than 70 percent of the tens of millions of offshore acres under lease are inactive, neither producing nor currently subject to approved or pending exploration or development plans.  For onshore leases, 22 million out of a total of 38 million leased onshore acres sit idle.   Instead of opening more of our protected lands and oceans to be drilled, companies should be forced to use the leases they already have, or lose them.

Proposed drilling bills wouldn’t generate enough revenue to meet transportation needs: As Rep. Ed Markey (D-MA), ranking member of the House Natural Resources Committee, emphasizes, the current funding shortfall to just keep our bridges, roads, airports and other existing transportation elements running is $12 billion for the next two years, and more than $75 billion over the next six years – “even using the most optimistic projections, Republican drilling proposals would generate, at most, a little more than $5 billion over 10 years. This is well short of the revenue needed to just to maintain inadequate current investment levels.”

More importantly, the revenue from increased drilling isn’t even guaranteed.  At a hearing late last year, Ryan Alexander of the nonpartisan Taxpayers for Common Sense spoke strongly against relying on “speculative” future revenue, stating,

“Paying for a couple of years of transportation funding with expected revenues from an increase in oil and gas drilling that will likely take many years to get rolling is not a responsible budget approach … It’s like buying the Ferrari tomorrow because you are sure a raise is coming sometime in the future.”

Using expanded drilling to lure Republican support has drawn harsh criticism from conservatives, as well.  As Heritage Action for America CEO Michael Needham told Politico, “One of the problems you have in Washington, is you take really bad legislation, which the highway bill is, and you put a sweetener in it … That’s what’s going on here.”

An oil import fee is a real solution for raising revenue. As CAP’s Daniel J. Weiss outlines, “An oil import fee could raise revenue to reduce oil consumption by investing in oil demand reduction programs. Such funds could also reduce the budget deficit—a top priority of congressional Republicans.” A temporary, extremely modest $2.50 per barrel fee on imported oil could raise $8 billion annually.  This would only increase gasoline prices made from foreign oil by six and a half cents per gallon.

It’s clear the House GOP priority is not repairing our crumbling transportation infrastructure, or even creating jobs – it’s simply a way to justify a reckless expansion of fossil fuel production into our last wild places and precious beaches to benefit Big Oil.  In this scenario, they win and the American people lose.

Kiley Kroh is Associate Director of Oceans Communications at the Center for American Progress.

4 Responses to Spill, Baby, Spill: House Transportation Bill Is Another Giveaway to Big Oil

  1. prokaryotes says:

    Later we can say that the “greatest” country singlehandly took out the world. The problem, they take out everything, even them self – how stupid is this?

    Power corrupts and absolute power corrupts absolutely.

  2. prokaryotes says:

    Power corrupts and absolute power corrupts absolutely.

  3. Sasparilla says:

    I have to take issue with this:

    “And despite decades of effort, oil shale has never been shown to be economically viable. ”

    This sounds so nice, just like it sounded nice when it was said with regards to natural gas shale several years ago – since we don’t want those massive oil and gas sources to be economically viable for development (since unlocking those carbon sources in these would be disastrous climate wise longterm).

    The reality is that companies are making lots of money off oil shale with the price of oil as it is.

    Here’s a quote from a CNN article from last year – Who gets rich off $100 oil?:

    “These [oil shale] companies basically start printing money once oil is above $90 a barrel,” said Fadel Gheit, an oil industry analyst with Oppenheimer & Co.”

    “When oil went above $100 a barrel for the first time in summer 2008, the economics of pulling oil from the ground changed dramatically, according to analysts. That made oil sands and oil shale economically viable for energy companies, so the industry shifted enormous resources into that technology.”

    Oil has been hanging around $100 a barrel for quite a while and long term will continue to go up despite any shorter term dips.

    For better or for worse, its economically profitable to pull shale oil out of the ground and we’re just going to suck every last drop of that fools gold out so we can burn it.

    And while the GOP truly runs all out for the oil companies they were getting lots done when we had Democratic majorities in both houses as well back in 2008 – 2010. It just comes down to money wants this done and money will get it done no matter what party is in power.

  4. Mark Shapiro says:

    Oil power corrupts oily?