Views on commodities and energy
Offshore drilling eclipsed by Wall St. debacle
John McCain’s crowd-pleasing chants of “drill here, drill now” and “drill baby, drill” seem like distant echoes of a quainter time — before the debacle on Wall Street.
America’s quarter-of-a century ban on offshore drilling officially ended Tuesday but the focus on expanding exploration and the concern over surging oil and other commodity prices are being swept away by the financial tsunami in the broader economy.
Congress was inundated with a raft of energy bills but it is probable most will fall by the wayside as lawmakers deal with the $700 billion bailout later this week.
McCain, the Republican presidential candidate, scored points on the campaign trail this summer with his call to open up America’s coasts to more drilling, in a bid to aid the beleaguered driver paying almost half a sawbuck for a gallon of fuel.
At the time Democrats, including Barack Obama, were dead against the rigs again setting up off America’s shores. Environmentalists scorned drilling as a panacea for high gas prices. Yet in August, with the polls showing support for drilling and oil still near record levels, the Dems made an about face to support limited offshore drilling.
Now Congress is subsumed by the bailout and members are itching to get on the campaign trail.
Many legislative efforts could go on hold for several months, and this could have wide ranging ramifications for industry. Congress passed its stop gap funding bill last weekend and did not, as expected, tuck in wording to extend the ban on offshore drilling.
The Democrats vow to reinstate the ban but it likely won’t be next year. So don’t expect big oil to make a dash for the Grand Banks just yet, especially with weakening oil prices.