The Heritage Foundation - Leadership for America

Today is Energy Freedom Day. The Congressional restrictions on energy leasing in 85 percent of America’s territorial waters, which have been renewed annually since 1982, were allowed to lapse this year. They expired on September 30th, and since overlapping White House restrictions were rescinded by President Bush a few months ago, nearly all of our federally controlled waters are now open for energy leasing.

At least on paper. In reality, the process of leasing and subsequent exploration and drilling takes a number of years. Part of the delays are due to multiple layers of regulatory red tape, and several opportunities for anti-energy activists to file administrative appeals and lawsuits. For a list of examples of how environmental groups tied up leases in litigation in the past, go here.

The Heritage Foundation is one of several organizations that has long argued that the first logical step in dealing with the nation’s energy challenges is to remove the government restrictions that prevent making full use of the oil, natural gas, and other energy resources here in the U.S. Thus, lifting the moratorium was a key step. But more needs to be done to ensure that the energy beneath these restricted areas – preliminary estimates put it at 19 billion barrels of oil and 84 trillion cubic feet of natural gas – can actually reach the market in a reasonable time frame.

Already some in Congress have suggested that they will put the moratorium back in place in 2009, indicating that the gains of Energy Freedom Day will require a constant defense or may be lost. Senator Harry Reid has already said, “We look forward to working with the next president to hammer out a final resolution of this issue.” But beyond stopping a new moratorium, Congress should also consider provisions, such as those soon to be introduced Drill Now Act (Sen. Jim DeMint R-SC). S. 3646 that would hammer out a final resolution this year with this president by:

• Permanently Ends Bans on Offshore Drilling in Atlantic, Pacific, Eastern Gulf of Mexico and Oil Shale Areas

• Expedites Leasing Process: Allows the Mineral Management Service to being preleasing and leasing activities immediately, without the need to completely write a new 5-year leasing plan. The Drill Now Act would eliminate the need to write this 5-year plan, and allows the pre-leasing to begin immediately. Under current law, drilling may not begin until 2011, but under Drill Now Act, drilling could begin in late 2009.

• Ensures 50/50 State Royalty Sharing: Creates revenue sharing for all states that allow drilling off their coasts divided – 50% for states and 50% for the Federal Treasury.

• Expedites Judicial Review of Environmental Lawsuits: Allows only 90 days to submit a legal case to U.S. District Courts. Any appeal of a district court can only be made in the U.S. District Court of Appeals in D.C. Limits judicial review for how the Secretary enforces laws.

Energy Freedom Day represents the first real step towards dealing with high oil prices by increasing the domestic supply. But additional efforts will be needed to ensure that the promise of additional American oil and natural gas becomes a reality.

Senior Policy Analyst Ben Lieberman co-authored this blog.