If Congress Lifts the Offshore Oil Drilling Moratorium, What Happens Next?

If Congress bows to pressure from Republicans and decides to lift its restrictions on offshore oil drilling, it is unclear exactly what would happen next. Such a move would take the country into uncharted waters, and there is no guarantee that a substantial amount of new drilling would take place at all.

The frequent "drill here, drill now" refrain of Sen. John McCain and his fellow proponents of offshore drilling that has become part of this year's presidential debate suggests that removing the congressional moratorium would throw open the nation's waters to a spree of new drilling—and, eventually, new oil.

But there are major obstacles that are rarely addressed. New drilling, if it does happen, won't take place willy-nilly. The most likely scenario, if Congress were to relax restrictions on drilling in federal waters, is that individual states would get the authority to approve or reject new drilling.

Yet even that issue is, technically, undecided. "There's no historical precedent here for this sort of action," says Eileen Angelico of the Minerals Management Service, the Interior Department office that handles offshore drilling in federal waters. "It all depends on what Congress decides to do."

One hint may come from a recent proposal by the so-called "Gang of 10," a bipartisan group of senators led by Democrat Kent Conrad of North Dakota and Republican Saxby Chambliss of Georgia. Earlier this month, just before Congress took its August recess, the group announced a compromise energy plan to open up the eastern Gulf of Mexico and give four states—Virginia, North Carolina, South Carolina, and Georgia—the right to "opt in" to new leasing. Chambliss said that it would be up to the state legislatures to approve new drilling under the proposal.

It's unclear at this point if state legislatures will grant such approval, or how eager they will be to take up the discussion. Historically, coastal states have resisted new offshore drilling, in state waters, which usually extend about three nautical miles out to sea, as well as in federal waters, which lie farther out from the shore. (Texas and Louisiana, among others, are notable exceptions.)

Concerns about the impact of oil spills on tourism and coastal industries loom large, as does disdain for the "visual pollution" of oil rigs looming off the coast. Florida, in fact, recently wrapped up an effort to buy back oil leases in state waters, many of which had been in granted to oil companies in the 1940s and had long become idle.

Critics also point to a Department of Energy report from 2007, which found that new drilling won't have a significant impact on oil production before 2030, and determined that the ultimate impact on prices would be "insignificant" because oil is a globally traded commodity.

Still, voter pressure could sway the debate. According to recent polls, between 55 and 60 percent of Floridians say they support new drilling off their coasts. In California, a slim majority—51 percent—now favor the idea. That number is up by about 10 points from a year ago.

Some of these polls may be a bit misleading. A widely cited Rasmussen poll in June asked voters if they would support drilling "to reduce the price of gas," a connection that most experts say is dubious at best. But the polls nonetheless capture an attitude shift among coastal residents that politicians of both parties have been keen to acknowledge.

At the state level, the battle will come down to who runs the legislature. Democrats control both the House and Senate in California, North Carolina, Oregon, and Washington, according to the National Conference of State Legislatures. Republicans, meanwhile, hold both chambers in Florida, Georgia, and South Carolina. Virginia is split. Because these bodies would likely be tasked with approving new drilling, such proposals could languish in Democratic-dominated states, or at least face sizable opposition.

Governors would also likely have some say in this debate. At the very least, they could strike down legislation. In a notable break with both his party and McCain, California Gov. Arnold Schwarzenegger has expressed vocal opposition to new drilling near his state. So have governors in Oregon, Washington, North Carolina, and South Carolina.

But the political winds are shifting. Presumptive Democratic nominee Barack Obama has shown a new willingness to allow expanded drilling. The Republican governor of Florida, Charlie Christ, recently changed his mind on this issue, saying he now supports drilling if it's done in an environmentally safe manner. Meanwhile, in North Carolina, where a competitive gubernatorial campaign is underway, Republican candidate and Charlotte Mayor Pat McCrory has said that, if elected, he would sign an executive order to allow new drilling. That might work for state waters, but he would need federal approval to go beyond there.

Even if some states eventually do grant approval for new drilling, there are numerous other potential obstacles. Environmental reviews will need to be conducted. State officials will have to consult with the public. Lease sales—in which oil companies bid on tracts they may want to explore--will have to be scheduled and held.

These requirements can take several years to complete. In 2006, for example, Congress opened up several million acres in the Gulf of Mexico for new leasing and drilling, of which a large portion had been previously off-limits. Because of the necessary planning work, many of these tracts won't come up for bidding until next year. (And even if these tracts receive bids, and an oil company chooses to develop them, it usually takes about seven to ten years for oil to start flowing, according the Energy Information Administration.)

The best estimates now suggest that about 18 billion barrels of oil are sitting in areas currently off-limits to drilling. But the oil deposits aren't distributed evenly. Nearly 10 billion gallons lie off California, compared with only about 3.8 billion along the Atlantic.

Drilling advocates would like to see all of those areas opened up, of course, but California, with its Democratic-controlled legislature and drilling-averse governor, could well stay out of play. The state is not included in the Gang of 10 proposal, which, compared with other drilling legislation being offered, has a better chance of passing Congress because it includes incentives for renewable energy.