If President Obamas Oval Office speech made one thing clear, it is that his administration and the activists who back it view the Gulf oil spill as simply an opportunity to advance their pre-existing agendawhich has nothing to do with cleaning up the Gulf, protecting the fragile coastal environment or fostering the regions economy.
The Obama administrations May 27 order to stop all deep-water exploratory drilling in U.S. waters of the Gulf of Mexico for six months, pending the report of a commission investigating the causes of BPs Deepwater Horizon accident, is a case in point.
Public and political reaction to the devastating oil release in the Gulf has revitalized a coalition of environmental and anti-energy lobbies that oppose not only deep-water drilling, but all offshore oil production and, in some cases, all use of fossil fuels. As usual, political opportunists have been quick to seize the moment.
You dont want to let a good crisis get away, declares Athan Manuel, director of lands protection in the Sierra Clubs legislative office. The organization is urging a permanent moratorium on new offshore drilling.
Kieran Suckling, executive director of the Center for Biological Diversity, disputes industry claims that shallow-water drilling is much safer than deep-water drilling. The center wants the existing six-month moratorium extended to all offshore drilling.
Such lobbying already has born fruit. On June 8, the administration issued new safety standards for shallow-water drilling. According to Bloomberg Businessweek, as many as 50 shallow-water drilling rigs that employ about 5,000 workers may need new permits in the next six weeks under the administrations new review.
According to Vikki Spruill, president and chief executive of the Ocean Conservancy, Mr. Obamas moratorium is merely the beginning: the first step needed in broader reform of a broken system.
Lexi Shultz of the Union of Concerned Scientists believes that the BP accident, along with the recent deadly explosion in a West Virginia coal mine, has shifted the [political] ground, putting opponents of oil, gas and coal production in much stronger position to obtain government restrictions on such forms of energy production.
Members of Congress already have held hearings on the BP disaster in the Gulf, and many more will follow as grandstanding legislators seek the publicity and positioning such high-profile events make possible. New laws and regulations are virtually certain to result from the hasty legislative activity. No one knows what the legal and regulatory situation will be a year from now.
Environmentalists and others seeking tighter restrictions on offshore drilling express no concern for the tens of thousands of people who will be put out of work directly or for the even greater numberthe retailers, restaurant employees, auto dealers, owners and employees of countless small businesses of every descriptionwho will be harmed indirectly.
Nor do the anti-industry factions shed any tears for the billions of dollars in lost capital that millions of shareholders in a wide variety of companies will suffer. Many anti-energy groups display little appreciation of the extent to which modern economies depend pervasively on the use of fossil fuels and petrochemical products.
The regulatory and legislative fallout from the oil spill could be highly damaging to the economy even if it were confined to the energy sector, because that sector is joined at the hip with every other part of the economy.
But a greater threat is that environmental and other anti-industry groups will parlay their windfall clout into more far-reaching political victories. They might, for example, steer the publics anger over Gulf oil pollution into the ongoing crusade to suppress carbon-dioxide emissions.
When this sort of political force presses against such a wide front, it creates regime uncertainty in the economya prevalent fear among investors and businesspeople about the future security of their property rights and their ability to reap adequate returns on risky long-term investments.
Once before, during the latter phase of Franklin D. Roosevelts New Deal, between 1935 and 1939, the governments actions brought about substantial regime uncertainty. The effect was to discourage long-term private investment, delaying full recovery from the Great Depression. For the 11 years from 1930 through 1940, as a whole, net private investment was negative. Not until 1941 did annual net private investment exceed its 1929 amount.
The oil pollution in the Gulf is already hurting residents, workers and business owners and causing heartbreaking damage to marshlands, beaches and the wildlife that inhabits the areas waters and wetlands. Let us hope the terrible situation will not be politically leveraged into measures that cause even greater damage to the national economy.