The “Spill Amnesia Bill”

A week, they say, can be a long time in politics. A year, therefore can be a lifetime. And long enough to forget.

A year on from the Deepwater disaster, Republicans are acting as if the America’s largest ever oil spill did not in fact happen. It was just a distant bad dream.

Yesterday, as the cost of gas prices continued to dominate the political scene in Washington, Congress passed a measure that would require the Interior Department to conduct four offshore oil and gas lease sales in the Gulf of Mexico and off the coast of Virginia.

Republicans are arguing that the measure will help ease the pressure on the country’s rising gas prices by speeding up oil and gas exploration in the Gulf.

Yesterday the White House opposed the measure, but stopped short of a veto.

As I blogged earlier in the week, this is a completely misguided assumption. The gas prices may indeed fall slightly in the US over the next few days, but this has nothing to do with the Republican action.

It is all to do with speculation. The Financial Times reports this morning the price of oil plunged $12 yesterday as investors spooked themselves over the strength of the global economy.

So it is speculation that is driving the price of oil not domestic US policies.

In turn, the Democrats are arguing correctly that the Republican action will once again put the Gulf of Mexico in danger and will have no impact on gas prices.

They argue instead that the GOP should eliminate oil and gas subsidies.

In a letter 2 days ago, Senate Majority Leader Harry Reid and Sen. Robert Menendez Called on their Senate colleagues to join efforts to close lucrative tax loopholes and end unneeded subsidies for big oil.

The letter stated: “Every one of us is hearing from families back home who are struggling with rising gas prices. At the same time, we’re reading this week about the record-breaking profits that the major oil companies are raking in– more than $30 billion in profits for the first quarter of 2011 alone. Something just doesn’t add up.”

They continued: “Now that the five biggest oil companies have become some of the most profitable companies in the world, taxpayers shouldering $4 a gallon gas prices should not have to foot the bill for tens of billions of outdated, unnecessary subsidies that go straight into the pockets of oil industry executives particularly in light of our increasing deficit. Just as we ask families to do their part to help reduce the deficit, Big oil companies need to step up to the plate and share in the sacrifice.”

They quoted the former CEO of Shell Oil who earlier this year even agreed that “subsidies are not necessary.”

Yesterday the House Democrats went further and forced a vote on a measure that would have ended billions of dollars in tax credits to the oil companies.

But Big Oil’s friends in the Republican party rejected the measure and instead voted to open up more areas for drilling.

Opponents attacked the measure as a “spill amnesia bill,” acting as if Deepwater somehow never happened. “For the sponsors of this bill, it’s as if the worst and most costly oil spill in history never happened,” said Rep. Rush Holt (D-N.J.).

To make matters worse it is the first of three pro-production bills the House Republican majority plans to bring up for a vote before Memorial Day, the start of the summer “driving season”.

The next one would require the Interior Department to offer leases off Southern California and Alaska and in the Atlantic containing “the most oil and natural gas resources.”

Another would speed permitting for offshore drilling.

All this has led Rep. Peter DeFazio a Democrat from Oregon to ask: “What’s really going on? It’s market manipulation, price gouging, profiteering and speculation, but the Republicans won’t take on their benefactors from Big Oil and Wall Street.”

If you want to find out more on subsidies, read Oil Change’s latest great briefing on it here.