August 22, 2008

It’s ‘Cruel Hoax’ to Imply New Drilling Will Reduce Gas Prices, Giffords Says


U.S. Rep. Gabrielle Giffords and her Republican opponent Tim Bee are parting ways on whether Congress should open up new areas for drilling.

On Monday, Giffords - a Democrat who is campaigning for a second- term in Southern Arizona's Congressional District 8 - called it a "cruel hoax" to imply additional drilling would lower gas prices for consumers.

The line was borrowed from Matthew Simmons, president of a specialized energy-investment firm - one of the expert speakers Giffords lined up for a two-hour forum at the University of Arizona titled "Energy Crisis Myths and Realities: Working Toward Common- Sense Solutions."

"We're going to really have to transition to renewables," Giffords told reporters following the event.

And she said she wanted to make sure that "even with the gas prices dropping, it's not going to be a situation where we think, 'Oh, we've solved the problem.'"

Energy issues appear to be high on voters' minds. Most polls show gas prices as being the second-most important issue this election cycle. In 2006, when gas prices where less than $3 per gallon, the topic rarely came up.

In a speech of his own last month, Bee said that "the impact on prices would be immediate" from new drilling.

"Markets would have to discount future oil prices for the expected gain in future supply," he said.

Giffords said she is not completely opposed to additional drilling. She's a co-sponsor of the so-called "Use It or Lose It" bill, which would require oil and gas companies to start drilling on areas within the 68 million acres of federal onshore and offshore territory where they have not explored. If they don't, the companies would lose the leases.

Giffords is also in favor of reinstating a ban on exporting U.S. oil.

As for opening up new areas for drilling, which Republican presidential candidate John McCain is also advocating, the congresswoman said she is in favor of "exploring first," and predicted such an allowance would be included in a congressional energy package.

"We don't know what we have out there," she said.

A moratorium on drilling off the Atlantic and Pacific coasts is set to expire this year, and Congress is debating whether to lift the ban.

Bee, however, says it is wrong to think that companies would be sitting on resources they could use.

"A company buys a lease because there is a 'possibility' that there may be resources on the land," he said in July. "It would be like mandating a farmer to grow crops where the soil isn't rich and doesn't produce."

But on Monday, Giffords said "companies would not have leased those areas if they had not thought there would be some potential for oil."

There wasn't harmonious agreement among Giffords' speakers on the effect drilling would have on prices.

Geologist Wes Ward generally agreed with Simmons that global demand is so high for oil and the increase of supply from new drilling would be so small that prices would barely decrease.

An added wrinkle: The amount of oil used by the developing world is expected to greatly increase over the next decade.

But one of Giffords' speakers, Reginal Spiller, an oil executive in Houston, advocated new drilling as a measure to bring down costs.

"We need to start (drilling) today," he said. "Eventually, it will effect price."

For Giffords, who has sponsored stalled legislation to extend solar tax credits, expansion and investment in renewable energy is a "deal breaker" when Congress goes back to debating an energy policy next month, she said.

"We don't know what we have out there."

Rep. Gabrielle Giffords, referring to the potential for discovering oil offshore

* Contact reporter Daniel Scarpinato at 307-4339 or [email protected]


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