The headline is certainly encouraging, seeming to be a bit of good news on an otherwise dreary day. But as they say, the devil is in the details. The House did indeed approve offshore drilling, however they will not allow drilling to occur where there is actually oil.

The House voted late Tuesday to open waters off the Atlantic and Pacific coasts to oil and gas drilling but only 50 or more miles out to sea and only if a state agrees to energy development off its shore.

Democratic leaders called it a step toward energy independence, but Republicans labeled it a “sham” because most of the estimated 18 billion barrels of oil believed to lie below off-limits coastal waters are within 50 miles of land and will remain out of bounds.

Even had the bill allowed drilling within 25 miles of land it would have been a joke. The bill requires oil companies to get State approval before drilling off their coast, yet there is no revenue sharing plan in place to compensate the States for oil taken off their shores. Without the promise of revenue, there is little to no incentive for any State to approve drilling of their coast.

The whole purpose of the bill seems to have nothing to do with offshore drilling, and everything to do with raising taxes on oil companies:

The House voted to roll back nearly $18 billion in tax breaks over 10 years for the five largest oil companies and require energy companies to pay billions of dollars in royalties they avoided because of an Interior Department contracting error.

House Speaker Nancy Pelosi, D-Calif., said the bill “represents a new direction in energy policy” and a “bold step forward that will end our dependence on foreign oil” by using billions of dollars collected in taxes on large oil companies to promote alternative fuels and energy efficiency.

The oil industry is already the highest taxed industry, operating on profit margins of roughly half those enjoyed by the banking industry, and less than a third of the software industry. To Nancy Pelosi though, the 8.5% profit margin Exxon realized last quarter was still to high, and needs to be taxed more, and for what purpose? To subsidize crap alternatives such as corn based ethanol.

Nancy Pelosi and company will look upon this as a victory for their propaganda machine once Bush vetoes the bill. It will allow them to run ads for the next two months leading up to the election claiming Democrats tried to lower energy prices but Bush would not let them. In the meantime, Americans are still waiting for a real energy bill to be presented in Congress.
Update: I was just making my way around the blogsphere to see what others thought about the bill. Although I have not had the opportunity to read it yet, if what the American Conservative Union claims is true, this bill is even worse than I had originally believed it to be:

Once again, as in other energy legislation, the bill needlessly increases taxes that only serve to increase the cost of energy. The bill will also increase electricity bills for the average consumer by forcing utility companies to use alternative fuels regardless of the cost. This provision has already been rejected by the Senate in a previous energy bill.

CQ Politics admits this is a political ploy on the part of Democrats:

Democratic leaders hope the legislation will provide political cover for moderate members of their caucus who face tough re-election fights.

Politics over policy.

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Congress, Election 2008, Energy, Features, Taxes