Saturday, January 8, 2011

Mr. President, About You're Energy Policy . . .?

It's not that Obama and his administration doesn't have an energy policy, its that what inchoate policy he does have is designed to drive us back to the days of horse and buggies for transport and campfires for heat. Obama's energy policy is concerned with making energy vastly more expensive for Americans and, indeed, to drive coal, our primary source of electricity generation, from the market.

Gas prices have skyrocketed 55% under the first two years of the Obama administration, yet that is nowhere near the goal of Obama's Energy Secretary, which is to:

. . . “figure out how to boost the price of gasoline to the levels in Europe.” At the time he made the statement, gas cost $7 – $8 a gallon in Europe.

Such prices would destroy America, where people and commerce normally traverse far greater distances daily than their typical European counterpart. Indeed, such prices would have deep ramifications for all aspects of our economy since virtually everything we do is dependent on energy. Moreover, the rise in gas and energy prices falls hardest on the poorest in our country. But that is a left wing goal that the Obama administration seems determined to achieve, in part at least by destroying our domestic oil production. This from the Heritage Foundation, describing acts by the Obama administration:

•Immediately after taking office in 2009, Interior Secretary Ken Salazar, canceled 77 leases for oil and gas drilling in Utah.

•The EPA announced new rules mandating the use of 36 billion gallons worth of renewable fuels (like ethanol) by 2020. [Note that ethanol actually increases green house gas emissions, increases food prices (which are now at world record highs, driving millions below the poverty line), and is a less efficient fuel than gasoline. In a word, it is the penultimate boondoggle.]

•This summer President Obama needlessly instituted, not one, but two outright drilling bans in the Gulf of Mexico.

•After rescinding his outright offshore drilling ban, President Obama has refused to issue any new drilling permits in the Gulf, a policy that the Energy Information Administration estimates will cut domestic offshore oil production by 13% this year.

•Interior Secretary Salazar announced that the eastern Gulf of Mexico, the Atlantic coast, and the Pacific coast will not be developed, effectively banning drilling in those areas for the next seven years;

•The Environmental Protection Agency has announced new global warming regulations for oil refineries;

•Interior Secretary Salazar announced new rules making it more difficult to develop energy resources on federal land.

Of course, that is not all for this administration. They are also conducting a war on coal. Coal provides nearly 50% of all the electricity generation in the U.S.:

The headline news for the coal industry in 2010 was what didn't happen: Construction did not begin on a single new coal-fired power plant in the United States for the second straight year.

This in a nation where a fleet of coal-fired plants generates nearly half the electricity used.

But a combination of low natural gas prices, shale gas discoveries, the economic slowdown and litigation by environmental groups has stopped - at least for now - groundbreaking on new ones.

"Coal is a dead man walkin'," says Kevin Parker, global head of asset management and a member of the executive committee at Deutsche Bank. "Banks won't finance them. Insurance companies won't insure them. The EPA is coming after them. . . . And the economics to make it clean don't work." . . .

Central to the left's war on coal and oil are the countless green organizations to whom we have turned over the keys to the courthouse, and with it, our energy and environmental policy. So at any rate, we aren't using our massive deposits of coal to provide affordable electricity for our citizens - ostensibly because doing so would contribute to greenhouse gasses. Instead, we are exporting ever increasing amounts of our coal to China so they can enjoy affordable electricity and contribute to greenhouse gasses. And then there is the EU, the entity that has done the most to promote the canard of global warming, is seeing a big increase in the building of new coal fired power plants, primarily in Germany.

The reality is that this destruction of our energy infrastructure will be felt for years to come, as energy prices continuously rise. It is insanity. The American Petroleum Institute recently pointed out, in an plea to alter Obama's destructive policies:

Increased access to domestic oil and natural gas—rather than increased taxes on the U.S. oil and natural gas industry—is the best strategy for increasing government revenue, jobs and energy production, a new study by Wood Mackenzie concludes.

“U.S. oil and natural gas companies are a major force in our economy and, with the right policies in place, could drive even greater economic benefits,” said API President and CEO Jack Gerard, during a “State of American Energy” address in Washington today. “These companies produce most of the nation’s energy, put millions of people to work and deliver billions in taxes and royalties to our government. The study shows increased access to areas currently off-limits would create jobs, grow the economy and dramatically increase revenues to the Treasury, at a time when the U.S. deficit is of national concern.

“We urge the Congress and the administration to promote energy policies that will aid our economic recovery and reduce our debt. This study shows increased taxes would take us backwards.”

Increased access could (by 2025) create 530,000 jobs, deliver $150 billion more in tax, royalty and other revenue to the government, and boost domestic production by four million barrels of oil equivalent a day, according to the Wood Mackenzie study, “Energy Policy at a Crossroads: An Assessment of the Impacts of Increased Access versus Higher Taxes on U.S. Oil and Natural Gas Production, Government Revenue and Employment.” Raising taxes on the industry with no increase in access could reduce domestic production by 700,000 barrels of oil equivalent a day (in 2020), sacrifice as many as 170,000 jobs (in 2014), and reduce revenue to the government by billions of dollars annually. An additional 1.7 million barrels of oil equivalent a day in potential production that is currently of marginal economic feasibility would be at greater risk of not being developed under the modeled tax increase. . . .

Obama's destruction of our economy is far from over, and indeed, his "energy policy" may, in the long run, may prove, in the near and mid-term, more destructive than Obamacare.

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