Obama's Energy Shell Game

Townhall.com ^ | May 1, 2012 | Bob Beauprez



Remember the shell game? The magician keeps up a steady stream of patter and diversions to make it difficult or even impossible to know where the pea is hiding. Our national energy policy today is much like the shell game.

In his patter President Obama says we need an “all of the above” approach—we heard it in his State of the Union address to Congress, meaning the country will benefit most by developing its vast oil, natural gas and coal resources along with hydro and nuclear power, while pursuing the development of renewable technologies.

But the President’s actions, as reflected by his budget proposal and his Administration’s various regulatory initiatives, reveal a strong bias against “all of the above” and a big tilt toward energy forms that are not able to compete in the marketplace. There is no level playing field.

Take two recent examples. In mid-April Obama ordered creation of a “task force” to “coordinate” the efforts of ten federal agencies seeking regulatory authority over hydraulic fracturing, the decades-old technology that is unlocking vast amounts of oil and gas from shale rock deep in the ground. Does anyone believe that a larger federal bureaucracy and more federal regulations piled atop state regulations is going to expedite responsible development of domestic oil and natural gas?
In another display of magical misdirection intended to shift focus from high gasoline and diesel prices, Obama asked Congress for $52 million to expand the federal bureaucracy to fight “oil speculators” and “market manipulation” and “illegal activity.” Oil companies are among his targets, but as The Washington Post pointed out, “a senior administration official deflected questions about whether regulators have detected any hint of manipulation and would not give an example of the sort of rigging the president suspected regulators might find with more resources.”
The problem isn’t speculators. The problem is we need more supply and this Administration throws up more roadblocks.
These roadblocks can’t alter chemistry. The energy sources that provide the most bang for the buck are oil and natural gas. And there is more domestic oil and gas available than experts previously thought. In fact, there’s an energy revolution underway in the United States, sparked by the application of hydraulic fracturing to reserves of oil and natural gas once thought to be uneconomical. It’s happening in Pennsylvania, Ohio, West Virginia, Texas, North Dakota, and right here in Colorado.
The oil and gas industry is now producing enough U.S. natural gas to meet our needs for 100 years. Domestic oil production has grown by almost 20 percent in the last four years. These resources called “unconventional” or “tight oil” and “tight gas” are a factor in reducing energy imports from unfriendly and unstable countries. Their development is creating hundreds of thousands of American jobs. Increased supplies of natural gas have driven down the price to below $2 per thousand cubic feet, saving consumers hundreds of millions of dollars in heating, cooling and manufacturing costs.
The White House website prominently features a graphic under the title of The Obama Energy Agenda that suggests the record production of natural gas and ramp up in domestic oil output somehow are a result of his Administration’s policies, though nothing could be farther from the truth. Production on federal lands and offshore is actually down. Gains have come from private lands in spite of Obama’s policies, not because of them. Obama has cancelled scores of existing leases, implemented moratoriums in the gulf, made millions of acres off limits to energy development, and blanketed the industry with regulations.
The oil and gas industry contributes nearly half a trillion dollars a year to the economy in wages, taxes, royalty payments, fees, and dividends. Yet in the president’s proposed budget, there are at least eight provisions that would punish this one targeted essential industry with increased taxes or costly regulation. At the same time, his budget includes generous doles to the “green energy” sector that the White House says will be the future of America’s competitiveness – that’s what he said about Solyndra, too.
Obama promised an energy policy based on science and transparency, but it has proven to be all about politics. While establishing the “most anti-oil and gas record in U.S. history” according to Steve Forbes, Obama has thrown away billions of borrowed dollars to reward and pacify his green constituency.
The United States does need an “all of the above” approach to assuring steady supplies of affordable energy. But, that likely won’t happen if the Administration more committed to playing an energy policy shell game than doing what’s right.
This article orginally appeared in the Pueblo Chieftain