With rising energy costs making it more expensive to drive our cars, heat our homes, and fuel our sputtering economy, many Republicans are criticizing the Obama administration for a failure to adopt a comprehensive energy policy. I believe that critique lets the president off too easily. His administration does have a national energy policy—it’s just a subservient by-product of his radical environmental policy.
This administration willfully ignores rational choices that would lower energy prices and reduce U.S. reliance on foreign energy sources.
In 2011, the average annual prices of a barrel of oil and a gallon of gas were higher than at any time in the last 150 years. If we are going to be serious about rebuilding our economy and helping American families who are struggling to make ends meet, this president must take action.
To pursue national and economic security, the president’s first obligations on energy should be to increase the quantity of domestic energy sources and to decrease the cost of that energy to consumers. That starts with implementing a clear strategy of increasing energy production in all sectors—including the hydrocarbon sources abhorred by the left—and by providing the kind of long-term regulatory certainty that private capital demands before investment.
While the president is quick to tell anyone who will listen that domestic oil production is higher today than at any time since 2003, that’s not the whole story. The truth is that today’s production levels are not based on anything this president has done, but on the decisions made by private companies before he took office. And much of this production is taking place on private land.
Because energy prices are driven by a sense of future risk, the president should create a more predictable environment for exploration and production. In an election year, the federal government is now suddenly attempting to reach pre-moratorium—that is, pre-2010 BP oil spill—levels for approving deep-water drilling permits. That’s not enough. The average number of deep-water drilling permits approved monthly by the administration is down by nearly 30% from the historical norm prior to the spill.
The reality is that the Obama administration slowed the permitting process long before the spill happened. Rather than playing catch up, we’re falling further behind. The American people and the oil and gas industry need certainty that energy independence, not politics, will drive our nation’s security.
The president should also start opening new fields where there is clear bipartisan local support—along the mid-Atlantic coast, the Eastern Gulf, and in Alaska’s National Wildlife Refuge—and he should stop slow-walking lease sales for onshore drilling on federal lands, which in 2011 reached an all-time low (since 1984), when discounting for leases sold in previous years.
He could also send a clear signal that his administration will not shut down the revolutionary hydrofracking technique that is making our nation the world leader in natural gas. It’s an industry that supported more than 600,000 jobs in 2010 and is expected to add more than a quarter million more jobs by 2015. The affordable prices that come with abundant natural gas have a tremendous impact on our steel manufacturers, fertilizer companies, plastics companies and individuals who need to heat their homes and fuel their vehicles. If you want more manufacturing, you need cheap and reliable natural gas—period.
By signaling its understanding that fracking is a safe way to produce energy, the administration would allay immense concern and encourage private industry to invest in a more extensive natural gas distribution and utilization infrastructure.
Third, the president could reverse a series of cabinet-level decisions that are at odds with a strategy of affordable domestic energy production. That starts with rebuking Energy Secretary Steven Chu, who once said that our goal should be to increase gasoline prices to the levels seen in Europe. It also means suspending regulations like Tier 3 gasoline standards that are expected to increase gas prices by 25 cents a gallon. And it means ordering the Environmental Protection Agency to go in the opposite direction from its currently hostile stance on domestically abundant clean coal energy.
These regulations—plus the mere threat of flawed proposals like cap and trade, which in 2008 the president said would “bankrupt” anyone who wanted to open a coal plant—are sending a message that the United States is not a viable place for major, multiyear capital investments.
Some estimates suggest that the U.S. could overtake Russia as the world’s top producer of oil and gas by 2020, and we should not be singling out one industry for tax increases that would inevitably lead to higher prices for American consumers. Rather than punish one type of producer in favor of crony capitalism, we should adopt a flatter tax code with lower rates and no loopholes that allows different energy types to compete in the marketplace.
Finally, the president should announce today that he’s going to reverse his decision on the Keystone XL pipeline. This pipeline would produce 20,000 construction jobs and 100,000 indirect jobs, and it would provide a much-needed transportation line between oil refineries along our Gulf Coast and production facilities in Canada, not to mention the booming Bakken oil fields of Montana and North Dakota. Our friends to the north have been reliable and steadfast trading partners, and the president should be making this pipeline decision on policy grounds instead of cheap political appeals to his liberal base.
President Obama claims to be focusing this election year on the American economy. To make that pledge true, he must make wholesale changes to his energy policy and put energy prices and energy independence ahead of zealous adherence to left-wing environmental theory.