Obama's Energy Push: More Than Words?
Is President Obama's effort in the last several weeks to tout his administration's commitment to energy production and to streamline energy infrastructure all talk--or is it action, too?
Obama has been talking energy nonstop as gasoline prices continue to rise. The administration has noted that domestic energy production has gone up during his term and that more drilling in the Arctic and Alaska is planned for this summer. Last week, Obama issued an executive order requesting federal agencies to expedite energy infrastructure projects, such as roads, renewable-energy generation, transmission lines, and pipelines--specifically the southern part of the Keystone XL pipeline.
What do you make of Obama's singular focus on energy these past several weeks? What factors, including the economy and environment, should the administration consider when implementing Obama's executive order on energy infrastructure? What, if anything, should Congress do in reaction to everything Obama is doing?

March 29, 2012 2:36 PM
EPA Undercuts Obama's Energy Promises
By Frank M. Stewart
These past few weeks, President Obama has shown that “he meant what he said and said what he meant”. He wants his administration to work toward a responsible, “all of the above” strategy, grounded in facts and sound science not in hyperbolic rhetoric. He wants to lead our nation to a cleaner energy portfolio that emphasizes decreasing reliance on foreign oil. The latest data seems to indicate that we are on that path.
Early on, the President gave strong support to a clean energy standard over a renewable energy standard. That has helped emphasize the importance of regional equity, technological viability, energy diversity, and the need for bridge fuels such as natural gas as critical to achieving a cleaner, more secure energy future. He recently called for the reorganization of the Interior Department, specifically merging the Bureau of Land Management (BLM) and the Office of Surface Mining Reclamation and Enforcement (OSM), to more efficiently manage its regulatory staff and oversee adherence to important rule covering oil and gas and wind. And jus...
These past few weeks, President Obama has shown that “he meant what he said and said what he meant”. He wants his administration to work toward a responsible, “all of the above” strategy, grounded in facts and sound science not in hyperbolic rhetoric. He wants to lead our nation to a cleaner energy portfolio that emphasizes decreasing reliance on foreign oil. The latest data seems to indicate that we are on that path.
Early on, the President gave strong support to a clean energy standard over a renewable energy standard. That has helped emphasize the importance of regional equity, technological viability, energy diversity, and the need for bridge fuels such as natural gas as critical to achieving a cleaner, more secure energy future. He recently called for the reorganization of the Interior Department, specifically merging the Bureau of Land Management (BLM) and the Office of Surface Mining Reclamation and Enforcement (OSM), to more efficiently manage its regulatory staff and oversee adherence to important rule covering oil and gas and wind. And just last week he indicated he supports an expedited construction of the southern portion of the Keystone XL pipeline, an economically justifiable, technologically reasonable, but politically risky decision.
The President applauded natural gas production in his most recent State of the Union address, yet another encouraging sign. His Interior Department appears to be working closely with industry leaders to adopt best practices based on sound science, regulations that will both protect our environmental integrity and allow companies to competitively and safely develop public land.
Despite the President’s praise for natural gas’ potential, the Environmental Protection Agency (EPA) appears to be intent on pursuing a reason to curtail natural gas production. While states like New York, North Carolina, Pennsylvania, and even California have shown a commitment to developing comprehensive programs for the best regulation of natural gas development, the EPA has focused singularly on worst case scenarios, such as their widely criticized investigation in Pavilion, Wyoming, searching for a reason to override state authorities.
Even in the face of EPA Administrator Lisa Jackson’s testimony last year that there were no known instances of groundwater contamination due to the process of hydraulic fracturing, certain elements continue to foster old, tired accusations against hydraulic fracturing. At the risk of making matters worse, the EPA recently asked for an additional $8 million in its latest budget request for yet another, as yet to be announced, study of natural gas production. States, on the other hand, have spent countless hours toiling away at plans that take a comprehensive look at all aspects of natural gas production not to focus on worst case scenarios, but to identify and address any issues that might inhibit the most effective, efficient, and safe development of these resources. It is time that the EPA and the states committed to working with the same playbook.
As with all things, it’s important that we judge the administration’s record on results, not rhetoric. In terms of energy policy, US domestic energy production is at a twenty year high and imported energy is at a twenty year low. The trends that were started under President Bush have continued and accelerated under President Obama. But as with all things, there’s still room to grow. With rising gas prices, I believe the President will buckle down to marry his actions to his words. More importantly, the Administration needs to rely on sound science and to partner with industry to foster a regulatory framework that spurs the investment and create the jobs that our nation needs.
Frank Stewart is the immediate past president and current board member of the American Association of Blacks in Energy (AABE).
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March 28, 2012 8:11 PM
Time to Really Listen to Americans
By Lance Brown
Executive Director of the Partnership for Affordable Clean Energy (PACE)
It is no novelty that politicians often employ promising rhetoric that fails to deliver. In some sense, we have come to expect our presidents to disregard major election initiatives and goals once they inhabit the Oval Office. President Obama, at least on energy issues, has been a man of action, showing his commitment to revolutionizing American energy through subsidy programs, executive orders, and EPA regulations. The problem, though, is that might be the bad news.
While President Obama seems to say all of the right things – increasing domestic energy production and pursuing cleaner air – he hasn’t always done a good job of listening to Americans. The public says they want less reliance on foreign oil, and the administration talks about alternative fuels rather than securing the flow of oil from Canada into the U.S. Now, under election year pressure, the administration alters its trajectory to at least partially support the project. It clearly will take more than words to stabilize gas prices, if that is possible at all.
But is the President l...
It is no novelty that politicians often employ promising rhetoric that fails to deliver. In some sense, we have come to expect our presidents to disregard major election initiatives and goals once they inhabit the Oval Office. President Obama, at least on energy issues, has been a man of action, showing his commitment to revolutionizing American energy through subsidy programs, executive orders, and EPA regulations. The problem, though, is that might be the bad news.
While President Obama seems to say all of the right things – increasing domestic energy production and pursuing cleaner air – he hasn’t always done a good job of listening to Americans. The public says they want less reliance on foreign oil, and the administration talks about alternative fuels rather than securing the flow of oil from Canada into the U.S. Now, under election year pressure, the administration alters its trajectory to at least partially support the project. It clearly will take more than words to stabilize gas prices, if that is possible at all.
But is the President listening to the public on electricity policy, the proverbial elephant in the room of American energy? The President has listened to Americans say consistently that they support clean air initiatives, interpreting that support as a mandate to engage the EPA in total warfare against the fossil fuels industry. But who doesn’t support clean air? And do those polled understand that major emissions like NOx and SO2 have decreased more than 65 percent in the past two decades, while electricity generation has increased by half. Has the president considered whether Americans support diversity of energy resources, as well as power affordability and grid reliability? Most Americans do.
The administration has clearly chosen a “more than words” approach to the electricity sector, issuing a flurry of regulations such as Utility MACT and CSAPR that make it more difficult to use coal, our nation’s most abundant energy resource. Just this week, the administration announced that it is proceeding with its greenhouse gas rule for new coal-fired power plants. This proposed regulation essentially signals the end of new coal-fired generation plants in the U.S., with the exception of plants using carbon capture technology. The regulation represents a high-water mark for EPA’s regulatory overreach, potentially affecting the long-term stability of American energy production and having ripple effects across the industrial sector.
Likewise, Utility MACT is another regulation that the administration should amend significantly. Much like the new greenhouse gas rule, Utility MACT threatens the nation’s core energy infrastructure and thus the economy. As Steve Miller, the President and CEO of the American Coalition for Clean Coal Electricity, noted in a recent statement, “The EPA’s heavy-handed regulations are forcing coal plants across the country to close, which will result in job losses, higher electricity prices and a less reliable electric grid. In many communities, shuttering these plants will also result in fewer local tax dollars, hurting schools and other public services.”
If the president is listening on these issues, it isn’t to the right people. Many of the administration’s actions have run counter to the goals of FERC (the body that was established to monitor problems with reliability), not to mention economists and state leadership. Just last month, 221 members of the House asked the Obama administration to halt its new greenhouse gas regulation. Why? Because the Obama administration’s regulatory actions are making America’s power sector weaker, more costly, and less robust.
Leaf through the myriad of regulations released by the EPA in the past three years and you will realize that American businesses and families are dealing with enough words. What they really want is a direction that makes sense, that protects them from higher energy prices and uses the resources we have to keep our nation strong and great. The good news is that they can have all of that, if the president will only allow them to have it.
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March 28, 2012 1:33 PM
Wanted: Statesmen in Washington
By Tom Stricker
Vice President of Technical and Regulatory Affairs, Toyota Motor North America, Inc.
No President or Congress – past or present – has much ability in the short-term to stem rising gasoline prices, absent draconian emergency measures like suspension of the gasoline tax. So instead, they typically offer up a variety of silver bullets and quick fixes designed to make voters feel better – and enhance their polling numbers – while not actually doing anything to solve the problem in the long-term. In this case, the “problem” is the mixed message of wanting to reduce oil dependence for the good of the country, while wanting to reduce gasoline prices for the good of the voter.
We’ve seen this movie a few too many times just in the transportation sector: George H. W. Bush promoted methanol; Bill Clinton promoted diesel hybrids through the Partnership for a New Generation of Vehicles (PNGV) program; George W. Bush promoted hydrogen fuel cells and later cellulosic ethanol; and Barack Obama has settled on electric vehicles as the solution. All of these Presidents have given speeches condemning high gasoline prices and...
No President or Congress – past or present – has much ability in the short-term to stem rising gasoline prices, absent draconian emergency measures like suspension of the gasoline tax. So instead, they typically offer up a variety of silver bullets and quick fixes designed to make voters feel better – and enhance their polling numbers – while not actually doing anything to solve the problem in the long-term. In this case, the “problem” is the mixed message of wanting to reduce oil dependence for the good of the country, while wanting to reduce gasoline prices for the good of the voter.
We’ve seen this movie a few too many times just in the transportation sector: George H. W. Bush promoted methanol; Bill Clinton promoted diesel hybrids through the Partnership for a New Generation of Vehicles (PNGV) program; George W. Bush promoted hydrogen fuel cells and later cellulosic ethanol; and Barack Obama has settled on electric vehicles as the solution. All of these Presidents have given speeches condemning high gasoline prices and vowing to do everything possible to reduce them…yet somehow expecting Americans to pay more for higher fuel economy or alternatives to gasoline. The definition of insanity is doing the same thing over and over again but expecting different results.
President Obama has taken an interesting approach by admitting lack of control over today’s gasoline prices and trying to shift the debate to longer-term energy policy. But he and the rest of Washington is still falling victim to short-term politics in the process. New transportation technologies can have a 10-year lead time. New energy and fuel sources can have a 20-year lead time. Neither of these realities aligns very well with our 2-4 year political cycles. Little good can come from energy policies or initiatives put forth in the months leading up to an election.
Political silver bullets inevitably fail and only get in the way of real progress. The problem then gets worse and encourages even more political silver bullets. Only when Washington rediscovers the art of statesmanship, and the voting public is willing to accept the tough truth, will we break this vicious cycle. We need a steady and measured approach, with reasonable goals and objectives, that does not try and solve the problem all at once, and that allows competition and consumers to decide the winning approach.
Energy policy should be designed to keep America competitive, healthy and prosperous, not to keep politicians in office.
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March 28, 2012 10:02 AM
We Need More Than Talk
By Jack Gerard
President and CEO, American Petroleum Institute
The president's singular focus on energy is for a single reason: On this issue his policies are diametrically opposed to the will of the American people. Poll, after poll, after poll in state, after state, after state shows that voters overwhelmingly favor more development of U.S. oil and natural gas resources. But instead w...
The president's singular focus on energy is for a single reason: On this issue his policies are diametrically opposed to the will of the American people. Poll, after poll, after poll in state, after state, after state shows that voters overwhelmingly favor more development of U.S. oil and natural gas resources. But instead we have seen only delay, after delay, after delay.
Today, America’s oil and natural gas industry produces 62 percent of the energy consumed in the United States. By 2035 – even with significant increases in renewable energy use and improvements in energy efficiency – the government projects oil and natural gas will still provide nearly 57 percent of our energy. So the question isn’t will we need more oil and natural gas, but where will we get it? Will we produce more in the U.S. and strengthen our energy partnership with Canada, or will we continue to rely on other sources? America’s oil and natural gas companies are investing billions of dollars every year to bring new domestic energy supplies to market and produce the energy America will need for a growing economy.
Seventy-six percent of voters nationwide believe that raising taxes on the energy industry could cost them more at the gas station and yet some in Congress – with the support of the Obama administration – are pushing proposals that will not only significantly reduce energy investments but will also harm job creation, diminish domestic energy production, and could increase fuel costs. The U.S. Senate will vote on an ill-advised bill this week to impose punitive new taxes on the oil and natural gas industry. They will do so even though a recent report by the non-partisan Congressional Research Service concluded that raising taxes on oil companies could diminish production and increase consumer fuel prices. And they will do so even though, with public fears of “Big Government” at near-record highs, this would take money away from the largest investors in technologies that reduce greenhouse gases so that government can direct such research.
Instead of playing political games that demonize an industry so critical to our economy, our leaders in Congress should be encouraging greater production of American crude oil and building the infrastructure necessary to receive more Canadian energy – such as the Keystone XL Pipeline. The price of oil is set on the world market, so decisions by the administration to lift restrictions on oil exploration and production in areas that are off-limits send an immediate signal to global energy markets that the U.S. is serious about developing its own resources, and history has demonstrated such signals can put downward pressure on prices.
It’s time to stop playing political games with our energy future, it’s time for progress.
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March 28, 2012 8:38 AM
Bioenergy Industry Needs Stable Policy
By Brent Erickson
Executive Vice President, Industrial & Environmental Division, Biotechnology Industry Organization
It’s an election year, and Democrats and Republicans are trying to present Americans with clear choices on the November ballot. Words are designed to appeal to voters, but actions will matter more for Americans' pocketbooks and freedom to travel. To achieve the goal of energy security, we need a long-term, forward thinking and stable energy policy.
High oil prices are hurting consumers now, and that can affect votes in November. But the problem is deeper than that and will last longer than the next election. Worldwide demand for oil will continue to drive the price up, taking gas prices with it. We need to increase supplies of fuel, reduce demand, and find alternatives that will control prices for consumers. We can’t afford to wait any longer to improve our biofuels policy portfolio.
While consumers are filling their tanks with $4-a-gallon fuel, they should bear in mind that they’re paying additional tax dollars for the U.S. military to fill its tanks, jets and ships. As the single largest fuel user in the United States, the military is as vulnera...
It’s an election year, and Democrats and Republicans are trying to present Americans with clear choices on the November ballot. Words are designed to appeal to voters, but actions will matter more for Americans' pocketbooks and freedom to travel. To achieve the goal of energy security, we need a long-term, forward thinking and stable energy policy.
High oil prices are hurting consumers now, and that can affect votes in November. But the problem is deeper than that and will last longer than the next election. Worldwide demand for oil will continue to drive the price up, taking gas prices with it. We need to increase supplies of fuel, reduce demand, and find alternatives that will control prices for consumers. We can’t afford to wait any longer to improve our biofuels policy portfolio.
While consumers are filling their tanks with $4-a-gallon fuel, they should bear in mind that they’re paying additional tax dollars for the U.S. military to fill its tanks, jets and ships. As the single largest fuel user in the United States, the military is as vulnerable to oil price spikes as the average consumer. Just like consumers, the Department of Defense is paying more at the pump while being forced to use less fuel. In 2011, the Pentagon spent $17.3 billion for 117.0 million barrels (roughly $148 a barrel), a 26 percent price increase from 2010.
Every time the price of oil goes up by $1.00 per barrel, it increases fuel costs for DoD by $30 million. But while consumers can find ways to use less fuel, when the military is forced to shift its budget to pay higher fuel prices, it comes at a cost of new equipment and troop training, reducing military readiness.
Increasing U.S. production of fuels – either petroleum or biofuels – will require long-term investment by private companies. Before they make those investments, fuel producers will need to know that U.S. energy policy will be stable for the foreseeable future. Oil producers rightly want to know – before they drill a new well – whether regulatory policy will allow them to complete the project. Advanced biofuel producers are no different.
The advanced biofuel industry is developing new technologies that will keep our energy dollars at home and reduce our dependence on oil. Companies have made demonstrable progress in the past five years. Even before reaching commercial status, the industry is creating jobs in research and development.
But before they make considerable investments in building new biorefineries to put this new technology to use, they want to know that energy policy will remain stable. We can’t afford policy reversal and it’s imperative that Congress act quickly to renew and extend the policies that have enabled the advanced biofuel industry to make the progress it has – so that we can complete the job.
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March 27, 2012 10:07 AM
It All Counts
By Amy Harder
energy and environment reporter, National Journal
(These comments were submitted by Nicole Steele, Program Manager of policy and research at the Alliance to Save Energy.)
Congress should support President Obama's continuing efforts to enhance our energy infrastructure. Although a recent AP study shows there is no correlation between domestic drilling and rising gas prices, focusing on making the production, transmission, and distribution of energy more efficient nationwide will ultimately create a stronger economy by increasing the productivity of every unit of energy used. Not only will improving this infrastructure boost our energy productivity - but it will also create jobs, make the U.S. more secure, and reduce pollution caused by wasteful energy usage. These improvements could include using more efficient fuel...
(These comments were submitted by Nicole Steele, Program Manager of policy and research at the Alliance to Save Energy.)
Congress should support President Obama's continuing efforts to enhance our energy infrastructure. Although a recent AP study shows there is no correlation between domestic drilling and rising gas prices, focusing on making the production, transmission, and distribution of energy more efficient nationwide will ultimately create a stronger economy by increasing the productivity of every unit of energy used. Not only will improving this infrastructure boost our energy productivity - but it will also create jobs, make the U.S. more secure, and reduce pollution caused by wasteful energy usage. These improvements could include using more efficient fuel sources from electricity production to transportation, upgrading transmission line infrastructure, and elevating our transportation system.
The Administration and Congress may not have a lot of power to influence rising gases prices, but their actions can certainly help us use less oil by increasing alternative transportation opportunities, supporting the development and expansion of needed infrastructure for new more efficient vehicles, and deploying congestion reduction systems to reduce idle time. Not only will reducing congestion and vehicle miles traveled help consumers by improving gas mileage, but it will also help our economy by making the transport of our goods and services more efficient.
If the President can implement his commitment to revising our outdated and inefficient energy infrastructure, the U.S. will be solidly on its way to becoming one of the world's most energy efficient economies. Congress and the Administration should consider energy efficiency as the cleanest, quickest, and cheapest way to shape our future energy policies for the purposes of improving our economy and environment.
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March 26, 2012 4:05 PM
US Needs Energy Actions As Well As Words
By Bernard L. Weinstein
Associate Director, Maguire Energy Institute at Southern Methodist University and George W. Bush Institute Fellow
President Barack Obama has been hitting back at critics of his administration’s energy policy. Last week, against backdrops of drilling rigs, pump jacks, and stacked pipeline sections in New Mexico and Oklahoma, he noted the big jumps in oil and natural gas production over the past three years as an indication of his commitment to an “all-of-the-above” energy strategy. He also proclaimed he would expedite construction of the southern section of the Keystone XL pipeline.
With gasoline prices rising, and an election on the horizon, it’s no surprise that Mr. Obama is talking about energy. But is it more than words? Has the President really embraced oil and natural gas as part of his long-term energy policy? The evidence is scant.
This week, Senate Majority Leader Harry Reid has scheduled a vote on legislation to repeal billions of tax deductions for big oil companies with the additional revenues used to finance extension of renewable tax credits. What’s more, President Obama wants to raise the current $7,500 purchase incentive for electric...
President Barack Obama has been hitting back at critics of his administration’s energy policy. Last week, against backdrops of drilling rigs, pump jacks, and stacked pipeline sections in New Mexico and Oklahoma, he noted the big jumps in oil and natural gas production over the past three years as an indication of his commitment to an “all-of-the-above” energy strategy. He also proclaimed he would expedite construction of the southern section of the Keystone XL pipeline.
With gasoline prices rising, and an election on the horizon, it’s no surprise that Mr. Obama is talking about energy. But is it more than words? Has the President really embraced oil and natural gas as part of his long-term energy policy? The evidence is scant.
This week, Senate Majority Leader Harry Reid has scheduled a vote on legislation to repeal billions of tax deductions for big oil companies with the additional revenues used to finance extension of renewable tax credits. What’s more, President Obama wants to raise the current $7,500 purchase incentive for electric cars to $10,000. (Of course since no one is stepping up to buy the Chevy Volt with a $7500 rebate, it’s unlikely an additional $2500 incentive will do much, if anything, to spur sales. At least there’s no burden on taxpayers).
As for Keystone, Presidential approval wasn’t actually required to build the leg from Cushing, Oklahoma to the Gulf Coast. If Mr. Obama can actually do something to accelerate its construction, that would help relieve the bottleneck at Cushing and allow Texas and Louisiana refineries to process domestic crude as opposed to imports from Venezuela and Mexico. But connecting the oil sands of Alberta to the U.S. crude oil distribution network is the most critical part of Keystone XL, and that project has been deferred indefinitely.
President Obama’s newly-found enthusiasm for oil, gas and Keystone-South is to be welcomed. But it must be followed with action if we’re to enhance America’s long-term energy security while boosting the nation’s economic growth.
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March 26, 2012 2:21 PM
Obama's March Madness
By Michael Brune
Executive Director, Sierra Club
When the president paid his first-ever presidential visit to Oklahoma this past week, he touted his "all of the above" energy strategy, leading off with statistics that should have been enough to make the American Petroleum Institute swoon: millions of acres opened for gas and oil exploration, 75 percent of our potential offshore resources opened to drilling, quadruple the number of operating rigs in the U.S. -- "enough new oil and gas pipeline to encircle the Earth."
From a certain perspective, it can be easy to understand why Obama is so eager to take credit for the increase in domestic oil and gas drilling. Gas prices are going up, people are hurting, and a Greek chorus of Republican candidates, politicians, and pundits is doing everything it can to pin the blame on him. That's neither fair nor accurate, but fair and accurate aren't the way the game is played. Politics and reality parted ways long ago.
The president, though, is supposed to lead. At several times, both as a candidate and as president, Obama has been able to transce...
When the president paid his first-ever presidential visit to Oklahoma this past week, he touted his "all of the above" energy strategy, leading off with statistics that should have been enough to make the American Petroleum Institute swoon: millions of acres opened for gas and oil exploration, 75 percent of our potential offshore resources opened to drilling, quadruple the number of operating rigs in the U.S. -- "enough new oil and gas pipeline to encircle the Earth."
From a certain perspective, it can be easy to understand why Obama is so eager to take credit for the increase in domestic oil and gas drilling. Gas prices are going up, people are hurting, and a Greek chorus of Republican candidates, politicians, and pundits is doing everything it can to pin the blame on him. That's neither fair nor accurate, but fair and accurate aren't the way the game is played. Politics and reality parted ways long ago.
The president, though, is supposed to lead. At several times, both as a candidate and as president, Obama has been able to transcend partisan bickering and gamesmanship and unite Americans around a higher purpose. Whether it was his race relations speech in Philadelphia, his moving remarks after the shooting of Congresswoman Giffords and 18 others in Arizona, or even his more recent proposal last fall of a commonsense jobs package, the president has shown a unique gift for capturing what's important, for showing that Americans of all political persuasions share common values, and for inspiring people to work together to solve complex problems. On his best days, the president can do this better than anyone in public life. But at the moment, when it comes to oil drilling and gas prices, it feels like we've got more of a politician than a leader.
Earlier this year, the president said that his administration was going to "double down" on clean energy, and in Oklahoma he did include some lines on how wind, solar, and efficiency are part of "all of the above." But what's the rest of that plan? What does "doubling down" really mean? What's the goal? How will we get there? Recently, most of the emphasis has been on Obama's policies in support of developing dirty energy -- oil in the Arctic (and the Gulf), coal in the northern Plains, and natural gas in the Northeast, at the expense of clean energy solutions that will actually get us out of this mess. (One of the administration's biggest energy achievements -- doubling fuel economy standards to 54.5 miles per gallon -- received just a sentence in his Oklahoma speech.)
As a strategy, "all of the above" has a fatal flaw, and it's encapsulated in something else President Obama said in Oklahoma: "As long as I'm president, we're going to keep on encouraging oil development and infrastructure, and we're going to do it in a way that protects the health and safety of the American people."
Again, that's politics, not reality. In the real world, anything we do that encourages and prolongs our national addiction to fossil fuels comes at a cost to the health and safety of the American people. The longer we go on doing it, the longer we'll pay that price. And we won't stop paying until the day we no longer need fossil fuels.
No one expects that day to come during President Obama's presidency. What we can't afford, though, is to see it pushed even further into the future on his watch. If President Obama is going to boast about drilling "all over the place," then he also needs to show us that he understands that one day the drilling must stop -- and the sooner, the better. The best way to do that? By putting some meat on the bones of his support for clean, renewable energy. The fossil fuel industries and their supporters won't thank him for it, but they've never thanked him for anything -- including boosting domestic oil production during every year of his presidency.
Bottom line: If President Obama is really committed to more drilling, mining, or fracking, then he had better deliver an even stronger commitment to the clean, renewable energy resources that will put fossil fuels behind us once and for all. That would be leadership. Declaring triumphantly "we are drilling all over the place" a week after reminding us that "we can't drill our way to lower gas prices"? That's not strong leadership. It's not even good politics.
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March 26, 2012 8:10 AM
All-of-the-Above
By David Holt
President, Consumer Energy Alliance
With the average price per gallon in the U.S. reaching $3.86 this month, it’s no wonder President Obama is talking about energy issues. The increase of 49 cents a gallon over the past two months alone translates to a $35 billion price tag for the broader economy – that’s just in direct costs that do not include related cost increases for transportation and other goods.
Fortunately, the President seems to understand this. Beginning with his State of the Union address in January, the President has stressed the importance of an all-of-the-above approach to energy – which indeed we will need to fulfill our long-term energy and security needs.
Unfortunately, the President has bought into the same notion that an Associated Press review proclaimed last week, that no matter how much oil we produce in America, it will not lower gasoline prices. Of course this claim contradicts everything we know about the basic economics of supply and demand. The AP study was b...
With the average price per gallon in the U.S. reaching $3.86 this month, it’s no wonder President Obama is talking about energy issues. The increase of 49 cents a gallon over the past two months alone translates to a $35 billion price tag for the broader economy – that’s just in direct costs that do not include related cost increases for transportation and other goods.
Fortunately, the President seems to understand this. Beginning with his State of the Union address in January, the President has stressed the importance of an all-of-the-above approach to energy – which indeed we will need to fulfill our long-term energy and security needs.
Unfortunately, the President has bought into the same notion that an Associated Press review proclaimed last week, that no matter how much oil we produce in America, it will not lower gasoline prices. Of course this claim contradicts everything we know about the basic economics of supply and demand. The AP study was based on our experiences during times when the U.S. reserve base was declining. We now know that we have an enormous resource base to tap. We also know that we can significantly increase domestic production and supply.
New technologies have allowed us to gain access to resources that could fundamentally reshape the world oil market. For example, according to a recent report by the Institute for Energy Research (which cites data from the Energy Information Administration, the U.S. Geological Survey and the Department of Energy), the United States holds more than 1.4 trillion barrels of technically recoverable oil (more than five times the amount of oil in Saudi Arabia) and 2.7 quadrillion cubic feet of recoverable natural gas.
Additional studies show that the expansion of certain energy-extraction technologies, including hydraulic fracturing, has made it possible for North America to achieve self-sufficiency by 2030. Removing the world’s largest consumer of oil as a major purchaser from the global marketplace would, without a doubt, significantly affect global markets, and by extension prices at the pump.
We believe, however, that in the short term, there’s more the President can be doing. If the United States approved the Keystone XL pipeline, increased energy development in Alaska and expanded oil production in the Gulf of Mexico, we would gain 2.3 million barrels of oil per day. Compare this to the roughly nine million barrels of oil we import each day and it’s hard to see how approving these projects wouldn’t reduce our exposure to global price shocks and the impact of speculators on the market.
Our nation is on the verge of re-ordering global energy markets. Doing so will require the attention of each of us to put actions to place that extend beyond the impact it has on November 2, 2012.
Our actions clearly do have significant impacts on energy prices. It’s time we get this country back to work by investing in America.
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March 26, 2012 8:05 AM
Actions Speak Louder than Words
By William O'Keefe
CEO, George C. Marshall Institute
As the saying goes, actions speak louder than words. The President’s actions on energy are like a book with mostly blank pages. From day one, he has made it clear that he views conventional energy as the fuels of the past. His focus, until recently, has been his “green” dream, which consists of energy not yet commercially viable.
A strong case can be made for R&D that leads to knowledge creation and technological innovation. But one can’t be made for fossil energy neglect.
While his Secretary of Energy and others in the Administration, until recently, had been supporting higher gasoline prices like those in Europe, his own Energy Information Administration has extensively documented that fossil energy will be our dominant sources of energy through 2035. Why the President has ignored this fact is something of a mystery but not a total one.
Actions over the past 3-pluse years show that President Obama believes in bigger government and government directed industrial policy. There is no evidence that he trusts or believes in market ...
As the saying goes, actions speak louder than words. The President’s actions on energy are like a book with mostly blank pages. From day one, he has made it clear that he views conventional energy as the fuels of the past. His focus, until recently, has been his “green” dream, which consists of energy not yet commercially viable.
A strong case can be made for R&D that leads to knowledge creation and technological innovation. But one can’t be made for fossil energy neglect.
While his Secretary of Energy and others in the Administration, until recently, had been supporting higher gasoline prices like those in Europe, his own Energy Information Administration has extensively documented that fossil energy will be our dominant sources of energy through 2035. Why the President has ignored this fact is something of a mystery but not a total one.
Actions over the past 3-pluse years show that President Obama believes in bigger government and government directed industrial policy. There is no evidence that he trusts or believes in market forces or recognizes the corrosive nature of the subsidies that he has been promoting.
The President has focused on his “green” dream overlooking the fact that abundant and affordable energy is essential for healthy economic growth. Our increasing use of computer technology, smart phones, and telecommuting as well as growth of the service economy require increasing amounts of electricity. That will come from coal, natural gas, and nuclear power, not wind and solar.
Exaggeration by politicians seems to be a foregone conclusion, but there should be limits. The President should be embarrassed to talk about domestic oil production going up during his term. The uninformed will believe him for a while. But in an era of instant communication and fact checking, the reality will surely come to the fore. Since 2009, oil production has risen from about 5 million barrels a day to 5.8 million. Almost all of that is from leases approved before President took office and from production on private lands, especially from North Dakota, which has more than doubled its oil production.
When it comes to actions that the President should have taken, he has said “no” to exploration in the eastern Gulf of Mexico, he has said “no” to offshore exploration, he has said “no” to the coastal plain of Alaska, and he has said “no” to Keystone XL which would reduce our dependency on imports from insecure regions of the world. His yeses have been for failed subsidies to companies like Solyndra, the failing GM Volt, the tsunami of regulations that have driven up fossil energy costs and led to shuttered refineries, and discriminatory tax proposals that would punish oil companies for being successful.
Unfortunately, the record of neglect over the past three years cannot be turned around quickly. All of the silver tongue rhetoric from the White House can’t put Humpty Dumpty back together. Although the President now seems to understand Everett Dirksen’s remark about seeing the light when he feels the heat, motorists are going pay the price of high gasoline prices for the foreseeable future.
The road to lower gasoline prices includes actions the President can control and some things that he can’t. Increasing the supply of crude will put downward pressure on price. The Saudis say that they will increase supplies and that will help but so would increasing our own production even more. A resolution to the situation in Syria and reducing tensions over the Strait of Hormuz would reduce the current risk premium, which has probably added 40-50 cents to the cost of a gallon of gasoline.
Stronger economic growth will encourage traders to invest in companies instead of oil futures, especially if expectations about future domestic oil production change. The number of contracts by speculators has increased significantly over the past couple of years. A stronger dollar resulting from sounder fiscal and budget policies would also lower the price of oil, which is denominated in dollars. And regulatory reform in practice instead of just words would do wonders.
President Obama would do well to remember John Adams admonition that “facts are stubborn things and whatever our wishes, our inclinations … they cannot alter the state of facts and evidence.” The facts and evidence on gasoline prices and energy are not kind to the President.
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March 26, 2012 8:02 AM
The U.S. Energy Fantasy
By Scott Sklar
President, The Stella Group, Ltd & Adjunct Professor GWU
The US public and the US political system are living in their own fantasy. These US mindsets are framed in the 1960's when the United States was the biggest global economy by far and the largest producer of energy. Petroleum, uranium, natural gas, and coal are now global commodities which are driven by the highest bidders and the highest users. No more can the United States flex its energy production and large markets to impact energy pricing. China, India, Brazil, and the European economies have equal stature in the global energy picture. Since President Obama became President of the United States, oil rigs have increased by four times - quadrupling domestic oil drilling. In fact, all of our natural gas and petroleum rigs are more than all of the rest of the world combined. But as supply increases so does demand – and there is no way to ignore that capitalistic principle. The US has 3% of the world’s population using 25% of the world’s resources. But now with rapidly increasing economies exemplified by China and India, about a third of the global population ...
The US public and the US political system are living in their own fantasy. These US mindsets are framed in the 1960's when the United States was the biggest global economy by far and the largest producer of energy. Petroleum, uranium, natural gas, and coal are now global commodities which are driven by the highest bidders and the highest users. No more can the United States flex its energy production and large markets to impact energy pricing. China, India, Brazil, and the European economies have equal stature in the global energy picture. Since President Obama became President of the United States, oil rigs have increased by four times - quadrupling domestic oil drilling. In fact, all of our natural gas and petroleum rigs are more than all of the rest of the world combined. But as supply increases so does demand – and there is no way to ignore that capitalistic principle. The US has 3% of the world’s population using 25% of the world’s resources. But now with rapidly increasing economies exemplified by China and India, about a third of the global population with parts of Africa and Latin America also rapidly modernizing, there is no way the United States will ever drill out of this predicament. US presidents are actually quite limited in what they can do when most actual energy policy rests with governors, county executives and mayors. What the last four Administrations have attempted to do was increase energy efficiency – using less energy to do more, while providing a portfolio of options for liquid fuels and electricity from domestic renewable resources. This Administration and the US Congress needs to accelerate this bipartisan efficiency and renewable energy portfolio that so far has been caught in the political mud fight. There is no silver bullet regarding energy and this domestic rush for fossil fuels will dramatically deplete water reserves that will have far greater severity to the US economy and national security than the stress we have so far experienced in energy.
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