Here is a summary of what is happening in Washington on the oil drilling issue from the blog Powerline:

Nancy Pelosi now says that she is "open to drilling," but It's probably more accurate to say that she is open to not being crushed in November. She can read the polls, and an overwhelming majority of Americans support the Republicans' position, that it is important to develop our own energy resources. Pelosi says she could support drilling (or a vote, anyway) if drilling is part of a broader strategy. But of course the Republicans in Congress are pushing the "all of the above" approach, so that isn't really the issue.

The Republicans have gotten traction with their ongoing protest in the House chamber. More Republicans have returned to Washington during the recess to man the effort. One of those is my friend and Congressman, John Kline, who led today's effort. He did a series of interviews through the day, including one with bloggers, and live-blogged the proceedings on his official site. Now that voters are becoming aware that the Republicans are the ones who want to employ Americans to develop our own resources rather than continuing to outsource our energy production by shipping $700 billion a year abroad--there's a tough decision!--the Democrats have no choice but to pretend, at least, to be in the mainstream on the energy issue.

Which doesn't mean that a meaningful energy package will be enacted. The Republicans want a vote on their American Energy Act, but I don't think there is any way they can force it, except perhaps through public pressure. The Democrats' strategy will be to put together a package that includes a token amount of drilling, but does nothing to clear away the thicket of regulations and litigation that surrounds any actual attempt to extract petroleum from the ground. They will then count on their allies in the plaintiffs' bar to tie up any oil production for years, if not decades, to come. This is the strategy they have employed successfully with respect to the NPR-A region of Alaska.

One of the Democrats' problems is that Congress's ban on offshore drilling and shale oil development will expire in 49 days. The Democrats would like to extend the ban, thereby damaging our economy further, but it's hard to see how they can.

So that's the maneuvering that will take place over the coming weeks: the Republicans will be trying to unleash our economy, create great jobs, and keep some, at least, of that $700 billion at home. The Democrats will be trying to cripple our economy further by imposing "windfall profits" taxes to disable our own oil companies, which are puny by international standards, and otherwise pretend to help solve our energy problems by subsidizing a random selection of their friends and political supporters.

The one thing you can be sure of is that the accounts you read in your daily newspaper over the next three months will bear no resemblance to what is actually going on in Washington.


The Democrats can read the polls, so they will have to do something that makes it appear that they support drilling. Recent events with Russia and Georgia clearly show that the US needs to have domestic supplies of energy sufficient to satisfy most of the country's needs. If drilling is approved, Democrats will rely on their liberal lawyer friends to bring lawsuits to prevent any drilling from occurring. They will claim that fossil fuels threaten the lovable Polar Bears.

In Michelle Malkin's column today there are some interesting items about Nancy Pelosi. It turns out that, according to Malkin, Pelosi has a substantial financial interest in T. Boone Picken's company Clean Energy Fuels Corp. (ticker CLNE). This company will do better if the price of oil remains high.

Regarding T. Boone Pickens, he is trying to get the government to take over one of his previous great ideas. He bought right of way for a proposed pipeline to bring water from the Texas Panhandle to the densely populated Dallas-Ft. Worth region. That plan fizzled, but the right of way could still be profitable if used for high voltage power lines bringing electricity from windfarms in the Texas Panhandle to Dallas-Ft. Worth. A classic example of turning a lemon into lemonade.

I have been trying to find out more about the 68 million acres that Democrats claim oil companies have leases on, but are not drilling on. One curious thing is that there is actually significant oil production from some of the leases, like 100,000 barrels per day, but because of arcane rules the leases are not considered to be producing. In other cases drilling has been blocked by lawsuits. Then, from what I can determine, most of the leases in question went for $2 or $3 per acre for 10 years. That low price indicates that it is unlikely that there is any oil on most of those leases. For example, in areas where there is potential the lease prices are much higher. Recently in Tarrant County, Texas leases have gone for $30,000 per acre for 3 years, and in less developed areas in Louisiana leases are going for $5000 per acre for 3 years. It seems clear to me that companies are more likely to drill where they have paid such significant sums than where they paid trivial amounts such as $2 or $3 per acre.