Drill Baby Drill! The Correlates of “ Energy Independence ” in the United States
description
Transcript of Drill Baby Drill! The Correlates of “ Energy Independence ” in the United States
Drill Baby Drill! The Correlates of “Energy Independence” in the United States
Llewelyn HughesAssistant Professor
Department of Political ScienceGeorge Washington University
Prepared for International Political Economy SocietyWisconsin, MadisonNovember 12, 2011
Francisco Flores-MaciasSenior Oil Research Associate
LCM Commodities
Oil Market Intervention in AISs
“The chant is ‘drill, baby, drill.’ And that's what we hear all across this country in our rallies because people are so hungry for those domestic sources of energy to be tapped into.”
Sarah Palin, October 2, 2008
“Our dangerous dependence on foreign oil has been 30 years in the making, and was caused by the failure of politicians in Washington to think long-term about the future of the country.”
Barack Obama, August 5, 2008
The Puzzle of Oil Autarky
A number of states to frame oil policies in mercantilist terms, and implement policies designed to increase “energy independence”
This makes no sense given integration of international oil market
It also rejects the norm of non-discrimination; in fact, it rejects the utility of external markets for supplying crude oil
“Industry Preferences” Hypothesis
Legislative outcomes are a function of regulatory capture
“Constitutency Preferences” Hypothesis
Legislators represent district interests (employment, regional growth)
“Ideology” Hypothesis Policies are driven by the ideological predispositions of legislators,
particularly the framing of oil as important to national security
Why Energy Autarky?
“Energy Independence” and the U.S.
Congress can legislate to alter the incentives for domestic oil production in three primary ways
Leasing of federal lands and (OCS) Federal lands = 68% of undiscovered oil (Griles 2004) OCS = 1.76 billion hectares; 9.6 billion barrels since 1982
(Allred, 2007) Fiscal Incentives
Depletion allowances Tax credits for EOR
Import Barriers
“Industry Preferences” Hypothesis
Legislative outcomes are a function of regulatory capture
Why Energy Autarky?
“Constitutency Preferences” Hypothesis
Legislators represent district interests (employment, regional growth)
Why Energy Autarky?
“Ideology” Hypothesis Policies are driven by the framing of oil as a strategic resource, rather
than an economic commodity
Why Energy Autarky?
Empirical Strategy
Econometric analysis of U.S. Senate voting (1992-2007)
18 votes
Vote inclusion rules: 1) substantively focused on domestic oil prouction; 2) justified in “energy independence” terms
Votes reflect wide range of congressional policy instruments: federal lands & OCS leasing, subsidies
Votes to both increase and decrease incentives for domestic drilling
Votes that “succeed” and “fail”
Operationalization
Dependent Variable Senate votes on domestic drilling related legislation
Explanatory Variables
Campaign contributions from oil industry PACs
Party Affiliation National Journal ranking of foreign policy positions of
legislators
State GDP from oil and gas production Gasoline prices, inflation adjusted Constituent beliefs on legitimacy of military intervention
to secure oil
Industry Preferences
Ideology
Constitutency Preferences
Estimation Strategy
Panel data with binary dependent variable Cross-sectional units: Senate seats Time-series units: Bills and relevant procedural motions N = 1800
Addressing 3 main empirical challenges: Unobserved heterogeneity mixed-effects logit Endogeneity instrumental-variables probit Strategic Voting misclassification-corrected probit
… plus standard pooled probit and RE and FE probit and logit
Estimation Results
Estimation Results
Summary of Findings
Strong evidence that ideology influences outcomes Ideology indicators significant across all specifications other than
fixed-effects logit
Party indicator significant except in IV probit
Weak evidence constituency effects influence outcomes Oil/GDP is positive and statistically significant in most models
Effect disappears when potential endogeneity taken into account
Weak evidence industry influences outcomes PAC significant in most models; sign in expected direction
Effect disappears when potential endogeneity taken into account
Implications
Robust evidence that ideology, in addition to
material interests, affect legislative outcomes
Framing of oil as a strategic resource makes
autarky, not non-discriminaton, one driver of
legislative outcomes
Ideology and the limits of the capitalist peace
Appendix
Measuring Liberalization