Heeding the aphorism attributed to Otto von Bismarck - "Laws are like sausages, it is better not to see them being made" - perhaps it would have been best to avert one's gaze from the US Senate last week.
With gasoline and crude prices at record levels, Democrats and Republicans put forth proposals that each side said promised relief to their long-suffering (and complaining) constituents. The "world's greatest deliberative body" deliberated all week, but rent by partisan bickering, produced nothing.
Congress is scheduled to leave at the end of this week for a month-long recess, and members will take the debate to the hustings. The battle may resume in September when, because of the political imperative to do something prior to the election, a spirit of compromise may prevail. On the other hand, both sides may continue to snarl at each other and take their chances with the voters in November.
But just to recap last week:
The Democrats wanted to pass legislation curbing speculation in the oil market, which Majority Leader Harry Reid, Nevada, said accounts for as much as 50% of the price of oil. Democrats also wanted to release oil from the Strategic Petroleum Reserve, contending that putting more oil on the market would lower the cost of crude and, in turn, the price of gasoline.
Republicans also wanted to do something about speculation, although most energy analysts (who don't have to stand for election), contend that supply and demand issues, not speculation in the oil and gas futures market, are largely responsible for the high prices. But Republicans also wanted to lift the congressional moratorium on offshore drilling, which most Democrats and many coastal state Republicans would not support.
Now, here's where the sausage-making part comes into play (otherwise known as the legislative process). Democrats couldn't muster the 60 votes necessary to block a Republican filibuster on the speculation bill. Republicans wanted to bring their own speculation bill to the floor with provisions lifting the OCS moratorium along for the ride.
In an effort to compromise, Reid said he would allow two amendments to the speculation bill, one from the Democrats and one from the Republicans. The Democratic alternative would not have lifted the OCS ban, but would have increased domestic production by accelerating the pace of lease sales in the Gulf of Mexico and Alaska's National Petroleum Reserve, according to Platts. Reid expected Republicans to offer an amendment lifting the ban on OCS and oil shale leasing, and providing more personnel for the Commodity Futures Trading Commission.
"We've compromised our hearts out," Reid said.
For their part, Republicans - sensing that lifting the OCS ban may be a winning issue for them politically - rejected the offer, indicating that they wanted to continue the discussion in September.
The irony is that it's questionable whether any of the proposals that roiled the Senate last week would have an appreciable impact on prices in the near or mid-term.
Leave a comment