July 01, 2010
An Onshore Compromise over Offshore Drilling
Despite the Deepwater Horizon calamity, if the Kerry-Lieberman climate bill gets passed then concessions on offshore drilling are likely to be part of the deal. But Brookings' Mark Muro points out that this outcome could provide a "teachable moment and tie further fossil fuel use once and for all to energy system transformation," citing a post by Breakthrough's Jesse Jenkins and I, in which we argued that a 2009 GOP plan to dedicate the new oil and gas royalties to a clean energy fund would be an appropriate compromise if drilling is inevitable.
"[S]uch a stipulation makes powerful practical as well as symbolic sense. Data from the U.S. Energy Information Administration show that, in terms of their oil and gas yield, "access to the Pacific, Atlantic, and eastern Gulf [offshore] regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030."
However, as Jesse Jenkins and Yael Borofsky of the Breakthrough Institute have noted, what could make a difference would be to invest the tens of billions in potential federal revenue from oil and gas royalties in efforts to accelerate clean tech innovation and deployment and so help America develop the affordable clean energy sources needed to truly diversify its energy mix and secure our freedom from oil. In short, it's not so much the oil and gas itself that would make a difference in addressing the nation's energy needs but the potential associated revenue, which would help to address the nation's serious need to find the wherewithal to apply from $15 billion to $25 billion a year, each and every year, to clean energy innovation activities."