Tuesday, March 20, 2012

Obama's Energy War

The left's war on energy in America has been ongoing wince the 70's. With Obama, the first truly far left President ruling our nation through the EPA, the Energy Dept. and the Dept. of the Interior, the far left's war on energy has gone into overdrive. Let's address the war on coal first, the effects of which are literally looming just around the bend. Coal accounts for nearly 50% of our electricity, but the Obama administration is just now putting in place new regulations that will begin driving coal from the marketplace.  The costs of electricity will soon be ramping upwards, and the stability of our power grid will become suspect:

The Environmental Protection Agency (EPA) has dangerously underestimated the impact of its back-door mandates on affordable coal-based electricity generation. Instead of the 4.8 to 9.5 gigawatts(GW) of electric plant retirements predicted by EPA, 57 power plants with 25.1 GW of generating capacity have already gone on the chopping block due to U-MACT and CSAPR. That means more than 29,000 workers are losing their jobs, millions of consumers will be paying more for their electricity and the reliability of our electricity supply is being compromised.

U-MACT  is the EPA's latest regulation on boilers. CSAPR  is the EPA's recently launched Cross State Air Pollution Rule. Both are a backdoor attack on coal.  Neither has or will ever be voted upon by Congress under our current wholly bastardized form of government.  As I have said before, there should be  No Regulation Without Representation.

As to the war on oil, Obama claims that drilling in the U.S. to increase supply will have no impact on gas prices. That is ludicrous. We are already feeling the impact of the war on oil through our gas prices - the average price of which under Obama is shown in the chart below:

Increase supply relative to demand and prices fall - that is the law of supply and demand. As to the most important component of the cost of a gallon of gas - roughly 45% - is the cost of a barrel of oil.  According to Obama, we have "only 2%" of the world's oil and drilling would make no difference, we have to cut down on demand.  The cognitive dissonance in that statement is mind numbing.  Obama is invoking the law of supply and demand, but saying that only demand matters, not supply.  Time to go to Krauthammer:


As to oil scarcity in the U.S., saying that we have only 2% of the world's oil is so deceptive that it amounts to a stunning lie of omission.  What we are drilling today constitutes 2% of the world's oil. That is a minuscule fraction of what is actually in the ground in the U.S. and recoverable if Obama would allow it.

Do note that those figures come from the Dept. of Energy.  As Hot Air points out, the above pyramid includes:

  • At least 86 billion barrels of oil in the Outer Continental Shelf yet to be discovered
  • About 24 billion barrels in shale deposits in the lower 48 states, according to EIA.
  • Up to 2 billion barrels of oil in shale deposits in Alaska’s North Slope
  • Up to 12 billion barrels in ANWR, according to the USGS.
  • As much as 19 billion barrels in the Utah tar sands
  • A stunning 1.4 trillion barrels of oil shale the massive Green River Formation in Wyoming

The reality is that the Obama administration is doing all it can to depress oil production.  During the three years of the Obama administration, recovery of oil on federal lands has decreased by between 7% and 10% - and its been even worse for natural gas.  Again to Krauthammer:

President Obama incessantly claims energy open-mindedness, insisting that his policy is “all of the above.” Except, of course, for drilling:

●off the Mid-Atlantic coast (as Virginia, for example, wants);

●off the Florida Gulf Coast (instead, the Castro brothers will drill near there);

●in the broader Gulf of Mexico (where drilling in 2012 is expected to drop 30 percent below pre-moratorium forecasts);

●in the Arctic National Wildlife Refuge (more than half the size of England, the drilling footprint being the size of Dulles International Airport);

●on federal lands in the Rockies (where leases are down 70 percent since Obama took office).

But the event that drove home the extent of Obama’s antipathy to nearby, abundant, available oil was his veto of the Keystone pipeline, after the most extensive environmental vetting of any pipeline in U.S. history. It gave the game away because the case for Keystone is so obvious and overwhelming. Vetoing it gratuitously prolongs our dependence on outside powers, kills thousands of shovel-ready jobs, forfeits a major strategic resource to China, damages relations with our closest ally, and sends billions of oil dollars to Hugo Chavez, Vladimir Putin and already obscenely wealthy sheiks.

Obama boasts that, on his watch, production is up and imports down. True, but truly deceptive. These increases have occurred in spite of his restrictive policies. They are the result of Clinton- and Bush-era permitting. This has been accompanied by a gold rush of natural gas production resulting from new fracking technology that has nothing at all to do with Obama.

“The American people aren’t stupid,” Obama said (Feb. 23), mocking “Drill, baby, drill.” The “only solution,” he averred in yet another major energy speech last week, is that “we start using less — that lowers the demand, prices come down.” Yet five paragraphs later he claimed that regardless of “how much oil we produce at home . . .that’s not going to set the price of gas worldwide.”

So: Decreasing U.S. demand will lower oil prices, but increasing U.S. supply will not? This is ridiculous. Either both do or neither does. Does Obama read his own speeches?

Obama says of drilling: “That’s not a plan.” Of course it’s a plan. We import nearly half of our oil, thereby exporting enormous amounts of U.S. wealth. Almost 60 percent of our trade deficit — $332 billion out of $560 billion — is shipped overseas to buy crude.

Drill here and you stanch the hemorrhage. You keep those dollars within the U.S. economy, repatriating not just wealth but jobs and denying them to foreign unfriendlies. Drilling is the single most important thing we can do to spur growth at home while strengthening our hand abroad.

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