Democrats belatedly realized the political liabilities they incurred by adjourning Congress before addressing energy policy at the beginning of last month.  Late last week, they sent signals that they would allow votes on an expansion of domestic production on both coasts.  However, their bill has a “poison pill” that will act to discourage states from opening leases in the OCS:

While lifting a 25-year federal ban on most offshore oil and natural gas drilling, the legislation would block Virginia and other coastal states from sharing in a $2.6 trillion bonanza of tax revenue expected to flow from offshore fields. A Senate bill still in the works would give states part of the money.

Unless states stand to profit from offshore development, they almost surely would exercise their right under the bill to block any drilling within 100 miles of their shores, critics of the House initiative charged.

“With no financial incentive, no state will choose to ‘opt in,’ ” House Republican leader John A. Boehner of Ohio told reporters, “and this bill will result in little or no new American energy production.”

Rep. Thelma Drake, a Norfolk Republican who has taken a prominent role among pro-drilling forces, was even more critical.

The new bill “appears to be little more than a political ploy,” Drake charged in a prepared statement. Democrats intend to “tell the American people that they voted to go after more American energy while winking to the environmentalists to say that this increased production will never happen,” she said.

Nancy Pelosi argued that any revenue sharing would force a complete recalculation of the FY2009 budget, thanks to “pay-go” restrictions.  Republicans scoffed at that explanation, since the Democrats never even raised the “apy-go” issue during their approval of the bailouts for Freddie Mac and Fannie Mae.  Given that Congress has yet to pass a single appropriation for FY2009, it seems like a strange excuse at any rate.

The obvious intent is to deceive American voters into thinking that Democrats support new drilling in the US.  The new bill not only removes the incentives for states to issue new leases, it does nothing to protect the process of acquiring leases from excessive litigation certain to be initiated by the environmental lobby.  It supplies the pretense of policy changes to allow more production while keeping roadblocks to the actual work necessary to find and produce new fields for American energy needs.

Rep. John Peterson (R-PA) claims that no bill would be better than this legislation.  Republicans need to get a bill that would remove these obstacles and ensure that states get their fair participation from their natural resources, and need to act quickly in order to expose this distraction.