Free Markets, Free People

Daily Archives: January 4, 2011

The Obama Administration’s war on American petroleum

I’m in DC for a energy speech by American Petroleum Institute President Jack Gerard.  Disclaimer – API provided for my transportation, hotel, etc.  That, of course, will not change or even influence the fact that I am a strong proponent of the America petroleum industry and feel we should be exploiting our own native petroleum resources to the maximum.  Instead we seem to be on a reverse course.  Our government seems to be at war with the industry.  And, of course, those who’ll pay the price are you and me at the gas pump. 

If you noticed lately gas prices are going up.  Steve Everley of American Solutions gives you the top 5 reasons why that’s the product of the Obama administrations actions and policies.

It began right after President Obama took office in 2009 – Ken Salazar, the Secretary of the Interior, cancelled 77 oil and gas leases in Utah.  A year later 61 were cancelled.  Salazar also unilaterally extended the “public comment” period for new offshore drilling by another 6 months, thereby again delaying the process.

Meanwhile in Congress, the Democratic House passed a very harsh cap-and-trade bill.  It imposed taxes on CO2 which would have significantly raised the price of gasoline had it passed the Senate.  In fact, as Everley mentions, a less stringent cap-and-trade scheme studied by Harvard University would have raised gas to $7 a gallon.  Thankfully, the House bill died with the 111th Congress.  However, it now appears the EPA is prepared to do what Congress couldn’t and via regulation, impose a carbon cap.

Then came Deepwater Horizon and the excuse to shut down offshore drilling for a 6 month period.   That was quickly done by Salazar and we began to suffer the results in lost jobs and product.  Since the first moratorium has expired, the administration has unilaterally imposed a second one of 6 months.

The effect has been devastating to the industry (especially in the Gulf states) and it has put the US in an energy hole.l   The Energy Information Administration projects that we’ll see a decline of 220,000 barrels per day from offshore sources in 2011.  Prior to the Obama administration’s shut down of that source, EIA had projected increases in production for 2011.

Why this is happening should come as no surprise to anyone who has acquainted themselves with candidate and now President Obama’s energy policies.  They simply don’t include gas and oil.  In fact, as most should remember, when a candidate for the presidency Obama said he knew what he wanted to do in the energy arena would drive up the cost of gas, but he thought that was necessary for environmental reasons and because he thought it would help incentivize the green energy industry.

If I’ve said it once, I’ve said it a thousand times – any comprehensive energy policy must include the exploitation of all traditional energy sources to include oil and gas.  They are key and critical to our economy and way of life, and cheap energy is what helps fuel the economy.  Any energy plan must be reality based and recognize that you can’t abruptly cut off oil, gas and coal without wreaking havoc on that economy.   And you have to have a plan to transition the economy from the traditional fuels to the greener and more renewable fuels as they become viable and affordable.

None of the alternate fuels that the environmental crowd wants to replace traditional fuels fits either of those two criteria yet.  Until they do we must maintain and expand our traditional fuel exploitation.  To not do that, especially in a time of recession, is absurd.

Lift the ban on offshore drilling, support the oil, gas and coal industries and integrate them into any energy plan produced.  Do that now.  And then take a look at the state of alternate energy sources and make an honest, not political, assessment of where we are today, when those technologies and fuels will be viable and affordable, and plan accordingly.

That’s how it should be done.  That is not, however, how it has been done.

~McQ

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