An Energy Endgame

Left entirely to the whims of the Obama administration, there is little hope that oil and gas drilling in the Gulf of Mexico will remotely resemble the pre-moratorium activity levels any time soon. The regulatory agencies that oversee energy production are expanding faster than a bad fungus in a rain forest, but none of the expansion is fostering a return to energy exploration and production in the Gulf. In fact, it appears to be having just the opposite impact.

The best hope for a resumption of drilling likely rests on a seemingly contradictory end game: helping Obama pass something that he can call a “clean energy” bill.

The president has been obsessed with passing a “clean” or “renewable” energy bill since he took his oath of office. The first manifestation of that desire was the poorly drafted and ill-fated “cap and trade” bill rushed through the House early in his presidency. The legislation was so flawed that it never was brought up for a vote in the Senate. After running into other energy policy dead ends, the Obama administration tried a new gambit. By executive order he reopened the door for some expansion of drilling on the Outer Continental Shelf (OCS) and used that action as leverage to try to get members of Congress from energy-producing states to assist him in passing what he could claim to be a “clean energy” bill.

That apple cart was upset a month later when the Deepwater Horizon erupted in the Gulf.  Obama then shifted his strategy. He tried to use the spill to build public pressure on Congress to pass an aggressive “green” energy bill. That went nowhere, and the Obama administration shut down OCS drilling.

The president still seeks his Holy Grail of a renewable energy bill. His problem lies not just with Republicans. His energy policies are anathema to many Democrats from energy-producing states as well. (Remember Joe Manchin taking a rifle and shooting a copy of the cap-and-trade bill in his U.S. Senate campaign commercials?) If President Obama had unified Democratic support in Congress for his energy policies, he would have passed a bill in his first two years. He didn’t, and the game has changed significantly now.

Looking at the energy policy picture in Congress today is like looking at the pieces of a picture puzzle scattered around the floor in disarray. Various elements have to be fitted together to complete the task. It can be done, but it is not easy to accomplish. Obama will want some increases in use of renewable energy sources in the mix. Members of Congress from coal-producing states will want him to exhibit substantial restraint in his war on coal. Elected officials from western states will want reduced restrictions on energy development on public and private lands. Gulf Coast officials will want the handcuffs taken off of OCS development, especially in the Gulf of Mexico. Republicans and the business community will want him to restrain the Environmental Protection Agency from going forward with job-killing regulations on carbon dioxide emissions. The hard left and many environmental groups will strongly oppose any compromise centered on the elements listed above.

There is no doubt that President Obama desperately wants a renewable energy bill as part of his legacy. That goal is within his grasp. But to pass a bill that will require more energy production to come from renewable sources, he will have to be willing to compromise with members of Congress who want to increase domestic energy production from both renewable and non-renewable sources.

The ball is in the president’s court.



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