The Democrats' Energy Charade

Rep. Michele Bachmann wrote an excellent op-ed for the Wall Street Journal.  Full text is below or click here. 

The Democrats' Energy Charade
By MICHELE BACHMANN

Earlier this month the House of Representatives voted on an energy bill called the Drill Responsibly in Leased Lands (Drill) Act. The good news, for those of us who actually want to do something to lower gas prices, is that it failed.

The bad news is that Democrats will try again before the November elections. We can expect more legislation that claims to increase production, but in reality offers a framework of heavy regulation, litigation and union rules that could prevent new energy supplies from getting to market. And we can expect legislation that would likely hamper current oil and gas exploration.

Consider the details of Drill. It would not have opened new lands to energy exploration. Instead, it would have increased the number of lease sales in the National Petroleum Reserve -- the Arctic National Wildlife Refuge's (ANWR's) sister territory on Alaska's North Slope -- from one lease sale every two years to one every year. The problem here came in the fine print. The bill would have mandated that leasing be done in an undefined, "environmentally responsible" way.

We know from experience that such ambiguous language leads to lawsuits and delays. Further, the bill authorized the construction of new pipelines, but would have mandated that they be built in an "environmentally responsible manner" using labor agreements that earmarked all the work for labor union members.

The Democrats' focus on the National Petroleum Reserve is also striking. While it contains comparable known reserves to ANWR -- 10.6 billion barrels compared to an estimated 10.4 billion barrels in the wildlife refuge -- its fields are spread over 23 million acres. The portion of ANWR territory that should be opened to exploration covers a mere 2,000 acres. The National Petroleum Reserve's fields are a little over 250 miles from the current pipeline infrastructure, while ANWR is only 75 miles away. To top it off, currently there is no production in the National Petroleum Reserve because of ongoing litigation.

By focusing on a patch of Arctic tundra more spread out than ANWR, a greater distance from current pipelines, and subject to lawsuits not addressed by the legislation, the Democrats chose to respond to American cries for expedited drilling in such a way that would have made it harder to produce energy.

There's more. The Drill Act included "use it or lose it" restrictions that prohibit the federal government from issuing new exploration or production leases anywhere, unless the applicant can certify that every lease currently held is being "diligently developed" (again, to be defined later by lawyers) to produce oil or natural gas. Any lease not meeting the yet-to-be-determined standards would have to be relinquished.

Yet federal law already requires lease holders to produce within a set number of years, and energy companies have no incentive to let leases (paid for with up-front bonus fees and annual rent payments regardless of production) go idle. The "inaction" decried by some Democrats overlooks the exploration on these lands that is expensive, ongoing and time consuming.

In the real world, forcing companies to "use" their leases immediately or lose them means making exploration more cost-prohibitive. It will ensure that less exploration will take place. It's akin to forcing a pharmaceutical company to develop a cure for cancer in some arbitrary number of years or else lose the ability to seek the cure.

Unfortunately, the Drill Act is likely to be the first of many phony bills offered to the public this year. They will be aimed at giving the appearance of wanting to increase energy supplies. But in reality they will undermine efforts to increase domestic oil production.

Perhaps the Democratic majority will change course in the months ahead, and choose to join with Republicans to adopt commonsense proposals to unlock vast American energy reserves. But that will only happen if the American people make it clear that they know when they are being had.