April 4 2011
President Obama Outlines US Energy Policy
Against the backdrop of rising oil prices and ongoing unrest in the oil-rich Middle East, President Obama outlined his administration's energy policy to an audience at Georgetown University last week. Disappointingly, the President's energy policy to "win the future" remains the same as it was in the past: focused heavily on promoting unrealistic expectations for alternative, renewable energy sources.
"In an economy that relies so heavily on oil, rising prices at the pump affect everybody," Obama said in his address. "Workers, farmers, truck drivers, restaurant owners ... businesses see rising prices at the pump hurt their bottom line. Families feel pinched when they fill up their tank." Yet the President's proposals offer Americans little relief from these pains at the pump.
President Obama's new stated goal is to cut our oil dependence by one third, using a mix of policies that are heavily tilted in favor of subsidizing and mandating clean and renewable sources of energy and electric cars. He acknowledged the need for continued domestic oil and natural gas exploration and production, and blamed oil producers for being slow to act in spite of his administration's generosity in granting exploration leases and permits.
The President backed up this claim by citing a recent Interior Department report, which states that more than two-thirds of offshore leases in the Gulf of Mexico and more than half of onshore leases on federal lands are unused. However, this assertion neglects the realities of the oil business: leases are sold before it is certain if, where, or how exploration will actually occur, and the purchase of a lease, on its own, entails no right to explore, develop, or produce oil and gas resources. The existence of unused leases says nothing about the Administration's policies relating to oil and natural gas production, or the energy businesses' desire to produce.
The truth is the Obama Administration is stifling domestic energy production. As Jon Basil Utley of The American Conservative explains, "In the Gulf of Mexico, deep-water drilling and exploration has been shut down for almost a year while permitting shallow wells in known fields is agonizingly slow. On land, Interior Secretary Ken Salazar revoked oil drilling permits issued under the Bush administration, retroactively canceled already approved coal mining permits, and has thrown many new investments under a cloud of risk as companies fear more retroactive permit revocations. Environmental extremists file crippling, unending lawsuits precisely to cause costly, interminable delays and frighten off investors."
Rather than address some of these shortcoming in his administration's energy policy, the President is focused on "winning the future" with alternative sources of energy. His support for "energy independence," amounts to little more but advocating for government subsidies and mandates for alternative fuels and energy conservation, none of which will have a meaningful impact on America's energy use anytime soon. At the top of his clean energy list are solar and wind energy, which are also the costliest, and least likely to survive in a competitive energy market.
If President Obama had his way, Americans would get off oil completely by driving electric cars fueled by solar and wind energy. The path to this ambitious future is paved with subsidies and mandates benefiting the administration's cronies. Take General Motors, for example, which is one of the main beneficiaries of President Obama's support for electric cars. According to the Cato Institute's Patrick Michaels, "the Chevrolet Volt is beginning to look like it was manufactured by Atlas Shrugged Motors, where the government mandates everything politically correct, rewards its cronies and produces junk steel."
Americans should not be surprised that President Obama is offering them little relief when it comes to high prices at the pump. In fact, higher oil prices help advance the environmentalist agenda of switching from fossil fuels to "green" energy sources. This is good news for the President's other lofty goal mentioned in this year's State of the Union and reiterated in Wednesday's speech: to generate 80 percent of electricity in the US from clean sources by 2035. The fact that electricity prices would necessarily skyrocket is merely seen as a necessary stepping stone in the President's agenda to promote "green" subsidy-dependent energy at the cost of more affordable, conventional energy.
The President may call this "winning the future," but American families who will be paying more for basic necessities are bound to see themselves as losers.