The House Oversight Committee just completed a report entitled “Rising Energy Costs: An Intentional Result Of Government Action,” and it has the potential to be a bombshell if the media will give it any attention (which is, in all likelihood, probably not going to happen right now). If the report does sprout legs, which is entirely possible if gasoline prices break records this summer, it could set the table for withering attacks on the administration on energy – the most important economic issue among a host of them.
The report makes eight key findings, among them the fact that members of the administration have said higher energy prices were a goal, vast domestic energy resources are being ignored, the private sector is trying to boost domestic supply in the face of a hostile federal government, the EPA is in league with environmentalist kooks, Obama’s proposed changes to tax policy will gut domestic production and this “green energy” crap will put us further in hock to the Chinese thanks to the fact they’ve cornered the market on rare earth minerals.
We’ve said for some time that if you put America’s enemies in charge of our energy policy you wouldn’t be able to tell the difference from what we have now. It’s not just us saying this now; it’s the House Oversight Committee and its chairman, Rep. Darrell Issa. Maybe not in so many words, but read the eight findings from the report and it’s hard to see any other conclusion they’ve come to.
1. Key Obama Administration figures have expressed a belief that Americans should pay more for energy – a pattern of actions shows the Administration is, in fact, pursuing an agenda to raise the price Americans pay for energy.
President Obama, Energy Secretary Chu and others have stated that American consumers should pay more for energy, including electricity and gasoline. From a political perspective, increasing the price of energy (by whatever means) helps them make the case for “green” energy. Even beyond the effort to raise energy prices through “cap and trade” legislation that Congress rejected, a pattern of increased enforcement, regulatory delay and new hurdles can be seen across numerous agencies and approval processes. The result of this government action is less production, higher costs for producers, and more expensive energy.
2. While the Administration touts nascent “green” energy technologies, U.S. domestic energy resources are currently the largest on earth—greater than Saudi Arabia, China and Canada combined.
New developments in drilling and extraction technology have dramatically expanded the amount of total recoverable reserves of oil and natural gas. Much of this, however, may be put off-limits by the government.
3. Still trying to capitalize on domestic energy resources, U.S. firms are nevertheless investing billions of dollars to tap newly recoverable resources in California, Texas, Colorado and North Dakota, among others.
By 2015, fields in these areas could yield more daily oil than the Gulf of Mexico produces today, boosting domestic production by 20-40 percent and increasing our energy independence if government action does not severely restrict development and yields.
4. Recent Administration action has already led to significant cost and regulatory barriers that have limited domestic production of oil.
Even before the Gulf oil spill, the Department of the Interior had undertaken significant steps to restrict access to much of the energy resources located in the outer continental shelf: Alaska, the Gulf of Mexico, and along the Atlantic and Pacific coasts.
5. Other agencies have stepped up their efforts to indirectly curtail energy production through environmental regulations. The U.S. Fish and Wildlife Service has proposed placing the dunes sagebrush lizard that lives in New Mexico and Texas on the Endangered Species list—designation that would severely restrict production activity in a resource-rich part of Texas.
6. EPA has collaborated with environmental groups to target independent energy producers for environmental concerns not related to their operations.
In an email message reviewed by the Committee, environmental advocates and EPA’s Texas-based regional director exchanged celebratory accolades for efforts that create barriers to energy production. One exchange concluded: “Yee haw! Hats off to the new Sheriff and his deputies!”
7. President Obama’s proposal to increase taxes on the energy industry will cost American jobs and hamper economic recovery.
Independent operators are responsible for 95 percent of domestic oil and gas wells and they currently invest 150% of their domestic cash flow back into future projects development. Tax increases proposed by President Obama, some of which would be transferred to “green” energy producers, would cost energy producing firms a combined $12 billion in the first year.
8. Some green energy sources the Administration is promoting at the expense of expanded domestic oil, gas, and coal supplies create unintended environmental, security and economic consequences.
Green energy technology like batteries, turbines, hybrid power systems and similar technologies require “rare earth” commodities. China has a “near monopoly” on this market controlling between 95-100 percent of the market. Further, China derives 71 percent of its own energy needs from coal. Ethanol, for example, also requires large amounts of corn to deliver fuel. “[T]he entire U.S. corn crop would supply only 3.7 percent of our auto and truck transport needs while using 300 million acres of U.S. cropland.”
Actually, it’s possible to be hopeful about this. For one thing, at least now we’ve got Republicans in the House taking a comprehensive look at Obama’s energy policy and the damage it’s doing to the economy. And for another, we’ve also got Republicans recognizing the potential of domestic energy and making the case to open it up.
But it’s hard to go through this material and not get very angry. It’s been 40 years since the federal government essentially took full production of domestic energy off the table, and now we’re treated to outright lies like “we’ve only got two percent of the world’s oil reserves; we can’t drill our way out of this problem” as a defense of crony-capitalist subsidies for wind and solar and biofuels.
It’s long past time that the people who have foisted these disastrous policies on us are held to account.