Tuesday, March 29, 2011

Is President Obama’s oil policy actually
just a means to an end?

Commentary by James H. Shott


Judging Barack Obama’s policies on drilling for oil under the lands and waters of the United States evokes words like “incoherent,” “confused,” and “bizarre.”

While Mr. Obama decries our dependence on foreign oil, his administration cripples oil producers’ efforts to harvest oil reserves from US lands and waters through regulatory excess, administrative mischief and outright bans. In the Gulf of Mexico alone, 2011 will see 130 million barrels less production than the Energy Information Administration (EIA) predicted last May, and that number will grow to 200 million barrels in 2012. Those numbers represent a third of the Gulf’s total capacity and more than 10 percent of total US domestic production.

Even if the administration removes the obstacles and issues leases and permits, EIA Administrator Richard Newell notes that it takes several years before real production results, so the administration has decreased American oil production for years to come.

And now, after incapacitating much of his country’s oil production, the President of the United States went to Brazil to encourage it to drill for oil off shore, and the US would acquire some of that oil through a trade deal, while huge supplies of domestic oil lie undisturbed, and the US oil industry waits helplessly for red tape to be removed and new leases and permits to be issued.

As the various agencies of the government block production of domestic oil that reduces our dependence on foreign sources, the President publicly offers to help another country drill for its oil. Does that sound incoherent, confused, and bizarre?

The president told officials in Brazil, “We want to work with you. We want to help with technology and support to develop these oil reserves safely, and when you’re ready to start selling, we want to be one of your best customers.”

And then – incredibly – Mr. Obama said, “At a time when we’ve been reminded how easily instability in other parts of the world can affect the price of oil, the United States could not be happier with the potential for a new, stable source of energy.”

“It is beyond comprehension the administration would encourage trade for Brazilian oil while obstructing U.S. oil and natural gas development, eliminating related jobs here at home, and decreasing oil and natural gas revenues to the U.S. Treasury when the government is trillions of dollars in debt,” said American Petroleum Institute President and CEO Jack Gerard. “The message from the White House to America’s oil and natural gas workers: we’re going to outsource your job.”

Mr. Gerard then went on to point out the obvious, or what should be obvious to anyone: “What makes sense for Brazil also makes sense for the United States. Like every other nation, we should be developing our own oil and natural gas resources. It’s good for energy security, good for the economy, good for jobs, and it will help bring down our deficit.”

But the President then told the Brazilians exactly what is behind his incoherent policy: “In the United States, we’ve jump-started a clean energy industry, and we’ll soon have the capacity to produce 40 percent of the world’s advanced batteries,” he said. He could have added, “whether it makes any sense, or not.”

Mr. Obama’s oil policy looks like part of a plan to force enough fuel price discomfort on the American people that they will start walking, riding bicycles or taking the bus to work, and helps to justify high speed trains of which he and the other statists are so enamored.

We shouldn’t be surprised, though, because the Secretary of Energy in-waiting, Steven Chu, said as much back in 2008: “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe,” he declared. Indeed, we are well on our way toward reaching that goal. Gasoline has more than doubled in price since Mr. Obama took office, from $1.65 per gallon to around $3.50 per gallon. This is the steepest rise in gasoline prices since the Carter administration, and the Obama administration’s decrease in domestic oil production definitely will help increase prices.

Mr. Obama doesn’t mind ramping up oil drilling, so long as it’s not our oil, and he doesn’t mind keeping oil workers on the unemployment line and hurting local economies, even when America is desperate for job creation, so long as it advances his ideological agenda. “Damn the torpedoes; full speed ahead,” the saying goes.

The central planners in the Obama administration and Congress have it all figured out, and if we pesky personal liberty proponents and free market capitalists would just shut up and wise up, they would set up a command economy like the former Soviet Union’s, North Korea’s, and Cuba’s, and our omnipotent government would solve all our problems and take care of us from cradle to grave.

That’s what far too many of our so-called leaders and an increasing number of the American people want. But they should understand the wisdom of this thought, attributed to several great Americans from Thomas Jefferson to Ronald Reagan: “a government big enough to give you everything you want is strong enough to take from you everything you have.”

Cross-posted from Observations

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