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
![Page 1: Drill Baby Drill! The Correlates of “ Energy Independence ” in the United States](https://reader036.fdocuments.net/reader036/viewer/2022081520/56814f81550346895dbd345a/html5/thumbnails/1.jpg)
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
![Page 2: Drill Baby Drill! The Correlates of “ Energy Independence ” in the United States](https://reader036.fdocuments.net/reader036/viewer/2022081520/56814f81550346895dbd345a/html5/thumbnails/2.jpg)
Oil Market Intervention in AISs
![Page 3: Drill Baby Drill! The Correlates of “ Energy Independence ” in the United States](https://reader036.fdocuments.net/reader036/viewer/2022081520/56814f81550346895dbd345a/html5/thumbnails/3.jpg)
“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
![Page 4: Drill Baby Drill! The Correlates of “ Energy Independence ” in the United States](https://reader036.fdocuments.net/reader036/viewer/2022081520/56814f81550346895dbd345a/html5/thumbnails/4.jpg)
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
![Page 5: Drill Baby Drill! The Correlates of “ Energy Independence ” in the United States](https://reader036.fdocuments.net/reader036/viewer/2022081520/56814f81550346895dbd345a/html5/thumbnails/5.jpg)
“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?
![Page 6: Drill Baby Drill! The Correlates of “ Energy Independence ” in the United States](https://reader036.fdocuments.net/reader036/viewer/2022081520/56814f81550346895dbd345a/html5/thumbnails/6.jpg)
“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
![Page 7: Drill Baby Drill! The Correlates of “ Energy Independence ” in the United States](https://reader036.fdocuments.net/reader036/viewer/2022081520/56814f81550346895dbd345a/html5/thumbnails/7.jpg)
“Industry Preferences” Hypothesis
Legislative outcomes are a function of regulatory capture
Why Energy Autarky?
![Page 8: Drill Baby Drill! The Correlates of “ Energy Independence ” in the United States](https://reader036.fdocuments.net/reader036/viewer/2022081520/56814f81550346895dbd345a/html5/thumbnails/8.jpg)
“Constitutency Preferences” Hypothesis
Legislators represent district interests (employment, regional growth)
Why Energy Autarky?
![Page 9: Drill Baby Drill! The Correlates of “ Energy Independence ” in the United States](https://reader036.fdocuments.net/reader036/viewer/2022081520/56814f81550346895dbd345a/html5/thumbnails/9.jpg)
“Ideology” Hypothesis Policies are driven by the framing of oil as a strategic resource, rather
than an economic commodity
Why Energy Autarky?
![Page 10: Drill Baby Drill! The Correlates of “ Energy Independence ” in the United States](https://reader036.fdocuments.net/reader036/viewer/2022081520/56814f81550346895dbd345a/html5/thumbnails/10.jpg)
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”
![Page 11: Drill Baby Drill! The Correlates of “ Energy Independence ” in the United States](https://reader036.fdocuments.net/reader036/viewer/2022081520/56814f81550346895dbd345a/html5/thumbnails/11.jpg)
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
![Page 12: Drill Baby Drill! The Correlates of “ Energy Independence ” in the United States](https://reader036.fdocuments.net/reader036/viewer/2022081520/56814f81550346895dbd345a/html5/thumbnails/12.jpg)
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
![Page 13: Drill Baby Drill! The Correlates of “ Energy Independence ” in the United States](https://reader036.fdocuments.net/reader036/viewer/2022081520/56814f81550346895dbd345a/html5/thumbnails/13.jpg)
Estimation Results
![Page 14: Drill Baby Drill! The Correlates of “ Energy Independence ” in the United States](https://reader036.fdocuments.net/reader036/viewer/2022081520/56814f81550346895dbd345a/html5/thumbnails/14.jpg)
Estimation Results
![Page 15: Drill Baby Drill! The Correlates of “ Energy Independence ” in the United States](https://reader036.fdocuments.net/reader036/viewer/2022081520/56814f81550346895dbd345a/html5/thumbnails/15.jpg)
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
![Page 16: Drill Baby Drill! The Correlates of “ Energy Independence ” in the United States](https://reader036.fdocuments.net/reader036/viewer/2022081520/56814f81550346895dbd345a/html5/thumbnails/16.jpg)
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
![Page 17: Drill Baby Drill! The Correlates of “ Energy Independence ” in the United States](https://reader036.fdocuments.net/reader036/viewer/2022081520/56814f81550346895dbd345a/html5/thumbnails/17.jpg)
Appendix
![Page 18: Drill Baby Drill! The Correlates of “ Energy Independence ” in the United States](https://reader036.fdocuments.net/reader036/viewer/2022081520/56814f81550346895dbd345a/html5/thumbnails/18.jpg)
Measuring Liberalization