Editorial: Oil. Gas. Shutdowns. Ceilings. Collapse?
"Are you really sure that a floor can't also be a ceiling?" Maurits Cornelis Escher (1898-1972)
Today, the US government will be closed for business. As a result of Congress failing to agree on annual appropriations bills to fund "discretionary" spending programs, more than 800,000 federal employees will be suspended on unpaid leave.
Everything from national parks and museums to the processing of permits for oil and gas drilling on federal lands and new offshore renewable-energy projects will be affected by the shutdown. Analysts have suggested that a three-week shutdown could reduce the US GDP by as much as 0.9 per cent in Q4 and oil dropped by 1.1 per cent to a three-month low of $101.05 late last night.
While the phrase "government shutdown" sounds like the title of an apocalyptic film starring the former Governor of California, it is neither unprecedented, nor insurmountable. Since 1977, there have been 17 shutdowns, the last of which Clinton faced some 17 years ago without the sky falling down.
It is another 17 that we should really be afraid of: October 17th – the day our friend the debt ceiling expires.
Therein we have no precedent, nor any conception of what would happen next in the face of a full federal default. A fractious Congress already at loggerheads is a daunting prospect in these negotiations, and approval of the Keystone XL oil pipeline, an increase in offshore oil drilling and energy production on federal lands and a block on federal regulation of greenhouse gas emissions will all be bargaining chips on the table.
A house that is divided cannot stand, and the ceiling can also be a floor if the roof falls in….