Why the Oil Spill Could Hurt the Chances for Energy Reform

BP's oil spill has supplied ample opportunities to demonize the oil and gas industry and to argue for cap-and-trade; it is, in short, a crisis of the exact type Rahm Emanuel doesn't like to waste: the kind that adds urgency to a policy debate that has dragged on for years and can, depending on the political reaction to it, form a historic turning point for a major area of U.S. government policy.

Indeed Democrats are taking those opportunities. Energy reform has stalled in the Senate after the House passed its Waxman-Markey bill (which includes cap-and-trade for carbon emissions) by only seven votes in June of 2009, and liberal groups like MoveOn.org and the Center for American Progress are pushing hard to move it forward, hoping they can nudge the difficult boulder of Senate politics as oil pours into the Gulf and public dissatisfaction smolders. President Obama, in his speech yesterday at Carnegie Mellon University, called for an end to oil-industry tax breaks and said it's time to "aggressively accelerate" our transition to clean energy.

For those same reasons, ironically, the spill may actually damage the chances for energy reform, in another way: it has taken away one of Obama's prime bargaining chips.

Offshore drilling was a point of compromise for Democrats and Republicans, before BP's oil spill, something Obama could potentially offer in return for broader public support and, potentially, a few necessary Republican votes in the Senate. On March 30, less than a month before the Deepwater Horizon rig exploded, Obama made his tack to the center, lifting the moratorium on offshore drilling exploration off the East coast, to the chagrin of drilling's opponents, after Republicans had pressed for more offshore drilling for two solid years, rallying behind cries of "Drill Here, Drill Now," the House GOP's "All of the Above Energy Plan," and, as Sarah Palin put it, "Drill Baby, Drill."

It could be seen as Obama's opening move to get energy reform passed in the Senate, by incorporating Republicans' prime suggestion when it comes to new energy policies, and it seemed designed to head off concerns about higher gas prices, win political support, and get the ball rolling on a major reform bill, even as he asserted that the answer wasn't to drill everywhere possible.

Now, Obama's tone on offshore drilling is quite different, and that point of compromise no longer exists. The president acknowledges that drilling--including offshore drilling--is a vital and necessary source of energy for the nation, but two months after lifting a moratorium on the East coast, he is now extending a moratorium on deep-water leases permits and drilling action.

While BP's oil spill adds urgency to the energy debate and ramps up the pressure on drilling advocates to back off their support for any and all drilling, it also takes away an important middle ground the president had already begun to use to win support for reform. Now it appears Democrats will use pressure and crisis, exclusively, to work up the political will to change U.S. energy policies.