Obama administration officials ripped into GOP proposals to tie Strategic Petroleum Reserve releases to increases in federal oil and gas land leases and to require new analysis of the economic impacts of several gasoline-related environmental regulations.
A new GOP bill would require a new interagency panel to analyse how certain future Environmental Protection Agency rules might impact gasoline prices and jobs, but an EPA official said the bill wouldn’t reduce prices at the pump and could threaten Clean Air Act health protections.
The Gasoline Regulations Act targets a number of looming EPA regulations, including one for cutting sulfur in fuel by two-thirds, U.S. ozone standards and refinery emissions standards.
Gina McCarthy, an EPA assistant administrator, said in written testimony that the bill appears to use high gas prices as the reason to rollback public health protections, but those protections have little to do with gasoline prices. The bill would also duplicate analysis that is already done by officials.
“This legislation also delays — indefinitely — rules that EPA has not even proposed,” McCarthy said. “In short, this legislation does not address the reasons for the recent increase in the price of gasoline, while rolling back core aspects of the Clean Air Act — which was passed on a bipartisan basis and signed by a Republican president.”
Gasoline prices have steadily become a growing political point as prices rise near the $4 mark for the first time since 2008. The national average hit $3.91 Wednesday, a rise of 2 cents, according to the AAA gas gauge. Houston drivers are paying $3.87, or 9 cents below the record-high price of $3.96 in July 2008.
As prices have risen, the Obama administration has touted an “all-of-the-above” energy plan that officials say is the best long-term solution to the rising energy costs. Republicans, however, have argued the administration should remove unnecessary regulations and spur domestic drilling.
Republicans have also recently proposed that a 1 percent increase in federal lands leased for oil and gas production be required for every percentage point drawdown in oil from the strategic reserve, a 700-million-barrel stockpile on the Gulf Coast for emergency supply disruptions.
That proposal also came under fire by Obama administration officials.
Deputy Assistant Energy Secretary Chris Smith said in written testimony that the Strategic Energy Production Act would make it more difficult for to respond promptly to supply interruptions in crude oil. He argued that the bill would also make release from the strategic reserve more dependent on actions of potential lessees.
“It would also limit DOE’s ability to manage the SPR on a day to day basis, in which releases occasionally are necessary for the routine maintenance and operation of the reserve,” Smith added.
Republicans are proposing the legislation in seeking to position themselves against Democrats and the White House on oil and gas policy, which has surged to the forefront of political debate in the wake of higher gasoline prices. GOP lawmakers insisted Wednesday their legislation would increase oil supplies and decrease refining costs, helping put downward pressure on gasoline prices.
Democrats have called for cracking down on what they view as excessive speculation in oil markets and urged the White House to consider releasing oil from the strategic reserve.
But analysts have repeatedly said policymakers have few, if any, short-term tools to address gasoline prices, which are tied to oil prices set on global markets.
James Burkhard, managing director at IHS CERA, a research firm, said in written testimony said the current run-up in oil prices, the biggest determinant of what consumers pay at the pump, stems from geopolitics, specifically from uncertainty linked to the Iranian nuclear issue.
Analysts have said increased U.S. drilling would take years to kick in and would have, at best, a fractional impact on oil prices. They also have said the strategic reserve is intended for use only during supply emergencies, not as a price-smoothing tool as some Democrats have advocated.
Obama has ripped into GOP proposals to expand drilling into new waters and lands as an election-year “bumper sticker” that wouldn’t reduce gasoline prices. He has touted an “all-of-the-above” strategy of more oil, gas, renewable energy and fuel-efficiency boosts to cut oil use as a long-term strategy for U.S. energy independence.
- US Gasoline Prices Top $3.90 (247wallst.com)
Think everything’s fine in the US economy?
Austan Goolsbee — Obama’s former top econ advisor — is not so sure.
In a comment to Ben White’s Morning Money at POLITICO, Goolsbee explains how easily it could all slip away.
‘Unlike in other V-shaped recoveries from recessions, we cannot go back to what we were doing before … We have to shift away from housing and consumption to exporting and investing and that’s a very slow process … And the world has not been tremendously friendly to enabling us to do that. Europeans have fumbled and fumbled their way to negative growth … And China is slowing while the price of gas is going up. There are definitely some clouds. I’m not pessimistic. I’m just guardedly optimistic. … Productivity grows 2 percent a year. So if the growth rate slows to around 2 percent then the job market will stop improving and the unemployment rate will start going back up again. …
- Love is never having to say you’re too big to fail: Our favourite #FedValentines (business.financialpost.com)
- United States still in better shape than Europe: Goolsbee (business.financialpost.com)
- Austan Goolsbee’s Budget Math Is Wrong – More than 100 Percent of Long-Term Fiscal Challenge Is Government Spending (forbes.com)
- 5 Questions for Obama (politico.com)
Even former President Clinton calls the Obama administration’s deep water drilling policy ‘ridiculous.’
When President Obama introduced his energy plan in March, he pointed out that the U.S. keeps going “from shock to trance on the issue of energy security, rushing to propose action when gas prices rise, then hitting the snooze button when they fall again.”
It’s true that since the Nixon administration U.S. leaders have all made the same commitment to cutting our reliance on foreign oil, finding reliable sources of clean energy, and keeping energy prices low. Yet Americans keep hearing only short-term solutions and narrowly focused rules and regulations. The U.S. still imports more than half its oil, gasoline prices are at historic highs, and consumers are paying the price.
One bipartisan policy tradition is to deny Americans the use of our own resources. President George H.W. Bush took aggressive steps to keep off-limits vast supplies of oil and gas along the coasts of California and Florida. Since then, the build-up of restrictions, limitations and bans on drilling (onshore and off) have cost the U.S. economy billions of dollars while increasing our dependence on foreign sources of energy.
In the year since the Deepwater Horizon spill, the Obama administration has put in place what is effectively a permanent moratorium on deep water drilling. It stretched out the approval process for some Gulf-region drilling permits to more than nine months, lengths that former President Bill Clinton has called “ridiculous.”
Then there’s tax policy. Why, when gas prices are climbing, would any elected official call for new taxes on energy? And characterizing legitimate tax credits as “subsidies” or “loopholes” only distracts from substantive treatment of these issues. Lawmakers misrepresent the facts when they call the manufacturing deduction known as Section 199—passed by Congress in 2004 to spur domestic job growth—a “subsidy” for oil and gas firms. The truth is that all U.S. manufacturers, from software producers to filmmakers and coffee roasters, are eligible for this deduction.
We won’t achieve energy security by restricting our own companies from drilling or singling them out for punitive taxes. We’re talking about an industry that provides millions of jobs and, for the foreseeable future, the power for our economic growth.
So our focus right now has to be to find ways to encourage domestic energy supplies, even while we encourage new sources of energy. President Obama is right that this isn’t a long-term solution. But we can’t lose sight of what the country needs today.
Here are a few steps to take:
- First, let’s conduct a comprehensive review of existing policies, rules and restrictions and root out any that needlessly hamper energy production at home. Do the existing environmental rules, for example, accurately reflect the industry’s technological advancements in the ability to safely recover oil and gas supplies?
- Second, let’s develop the skills we need to find new and better ways to recover domestic supplies of energy—and to develop next-generation fuels to secure the future. That means encouraging more students to study math, science and other disciplines this industry needs.
- And third, let’s stop demonizing Big Oil to score political points. It does nothing to encourage the new talent, new ideas, and new entrepreneurs who are most likely to make breakthroughs in new sources of energy.
The kickoff of the presidential campaign season and the spike in fuel prices offer an opportunity to constructively debate a comprehensive national energy strategy. Effective policies will ensure sufficient domestic production and the healthy operation of U.S. companies abroad, which together will provide the secure, affordable energy supply that Americans need.
Americans have weathered one economic storm after another over the last few years. Yet, time and again, Washington policies have only made our families’ woes worse. From a failed trillion dollar stimulus to a healthcare overhaul that costs jobs and makes healthcare more expensive, Washington policies keep making it harder when Americans need the help most.
The latest: gas. Just as our economy is showing signs of recovery, gas prices are skyrocketing. In Chicagoland, a gallon of gas already costs over $4.50. That means pain for family budgets and employers trying to control costs and hire new workers. But smart federal policies can help. If we choose wisely, we can help lower energy costs for families with an all-of-the-above energy approach.
Taking advantage of America’s natural resources is a commonsense way to lower gas prices, reduce our dependence on foreign oil, and create jobs here. Unfortunately, many refuse to listen to commonsense.
By actively blocking and delaying American energy production, the White House’s energy policy has caused gas prices to spike, jobs to be lost, and made the U.S. more reliant on unstable foreign energy.
So far, 10% of the oil rigs in the Gulf of Mexico have been moved to foreign production. Each rig supports hundreds, even thousands, of jobs – jobs that may never return again. According to the U.S. Energy Information Administration, oil production in the Gulf has declined by almost 300,000 barrels per day since April 2010, and domestic oil production will fall by a full 13% this year. That’s strong proof that these policies decrease the production of domestic energy, destroying jobs and increasing the cost of gas.
What’s worse, Illinois already suffers from the third highest gas taxes in the entire nation. Sixty-nine cents of the cost of every gallon of gas in the Land of Lincoln is taxes.
House Republicans, however, are taking action to ease the pain of high gas prices.
Last week, a bill that resumes offshore lease sales off the coast of Virginia and in the Gulf of Mexico that have been delayed or cancelled by the Obama Administration passed the House of Representatives with strong bipartisan support. It directly addresses policies that have caused that drop in production in the Gulf of Mexico.
Over the next week, House Republicans will pass two more bills that would further boost American energy production. The first, requiring the Secretary of the Interior to act on Gulf drilling permit applications within 30 days, would end the uncertainty causing rigs to leave and energy companies to close. The second, compelling the White House to establish a five year offshore lease plan, would hopefully result in the additional production of three millions barrels a day within 16 years.
These are steps that would increase energy production, decrease gas prices, and create more jobs.
These initiatives and more are being advocated for by the House Energy Action Team (H.E.A.T.) – a group of Members of Congress working to lower gas prices, make America energy independent, and create jobs.
Surely these bills won’t cure every problem – but they are an important first step in reducing costs and making us more energy independent. The only way we can achieve that is through an all-of-the-above energy approach, including utilizing resources here.
Washington has an opportunity to do the sensible thing with energy policy. We need Democrats to join us and the American people. Let’s make energy policy the exception to the rule of Washington’s missteps the last few years.
By: Hans Bader 04/28/11 12:34 PM
Special to the Examiner
The Obama Administration has spent $1.6 billion on Chinese and other foreign wind power, notes Wintery Knight. The practical effect of these subsidies is to outsource more American jobs. ABC News reports on the subsidies for Chinese wind turbines contained in the stimulus package:
Despite all the talk of green jobs, the overwhelming majority of stimulus money spent on wind power has gone to foreign companies, according to a new report by the Investigative Reporting Workshop at the American University’s School of Communication in Washington, D.C.
Nearly $2 billion in money from the American Recovery and Reinvestment Act has been spent on wind power, funding the creation of enough new wind farms to power 2.4 million homes over the past year. But the study found that nearly 80 percent of that money has gone to foreign manufacturers of wind turbines.
“Most of the jobs are going overseas,” said Russ Choma at the Investigative Reporting Workshop. He analyzed which foreign firms had accepted the most stimulus money. “According to our estimates, about 6,000 jobs have been created overseas, and maybe a couple hundred have been created in the U.S.” Even with the infusion of so much stimulus money, a recent report by American Wind Energy Association showed a drop in U.S. wind manufacturing jobs last year.
The stimulus package also funnelled money to left-wing community organizers and liberal lobbying groups.
Gulf Oil CEO Joe Petrowski says President Barack Obama’s weekend comments in Brazil that the United States looks forward to purchasing oil drilled for offshore by that nation “is rather puzzling,” and “hypocritical” as his administration has imposed a virtual moratorium Gulf Oil, Joe Petrowski, Barack Obama, Brazil, Drillingon domestic drilling. The signal to purchase more foreign oil comes after the U.S. Export-Import Bank invested more than $2 billion with Brazil’s state-owned oil company, Petrobras, to finance exploration.
The CEO of General Electric, which has received government “green jobs” money, is a close Obama advisor. GE has been busy outsourcing American jobs, eliminating a fifth of its U.S. workforce since 2002. GE made $14.2 billion in profits in 2010, but paid no taxes at all, even though America’s corporate tax rates are among the highest in the world, and shareholders in American companies are burdened by heavy, double taxation. (American companies pay hefty corporate income tax on their earnings. Then, taxes are imposed yet again on that same income when it is distributed to shareholders as dividends. The shareholders have to pay income tax on that same income, hence double taxation.)
Oddly, while subsidizing some foreign “green” jobs, the stimulus package also contained other terrible provisions that ignited trade wars with Mexico and Canada, wiping out more jobs in America’s export sector and aggravating the U.S. trade deficit.
04/26/11 6:12 PM By: Mark Tapscott
President Obama says there’s not much the federal government can do to bring down gas prices any time soon. Michael Bromwich, Obama’s chief bureaucrat in charge of issuing permits for oil and gas companies to drill off-shore, said the same thing today:
“‘Even if we permitted the hell out of everything tomorrow — every pending permit, some permits that haven’t even been filed yet — it would not have a material effect on gas prices. That’s the simple, clear reality,” said the director of the Bureau of Ocean Energy, Regulation and Enforcement (BOEMRE).
Both Obama and Bromwich either are purposely lying or they simply don’t know what they are talking about. Check out the chart that accompanies this post. Notice what happened on July 14, 2008? Oil prices suddenly plummeted from their historic high of $145 a barrel. Why?
Because that was the day President George W. Bush signed an executive order lifting the moratorium on off-shore drilling in the eastern half of the Gulf of Mexico and off the U.S. Atlantic and Pacific coasts. Overnight, the price per barrel of oil plunged, and that plunge was reflected at the pump soon thereafter.
In other words, Obama could with the stroke of a pen sign an executive order telling his appointees at EPA, the Department of Interior and the Department of Energy to stop throwing up obstacles to increased U.S. oil and natural gas production and instead work with the energy industry on a crash program to “drill here, drill now.”
April 24th, 2011
President Obama recently said that the economic situation was worse than they expected when he took office. That’s code for “blame Bush” again for Obama’s failed economic policies, which have not stimulated the economy.
He has chastised the business sector for sitting on over $2 trillion in accumulated cash instead of hiring people they do not need. That’s blaming the business sector for not making stupid decisions to prop up his failed policies.
And now that people are feeling the pain at the pump, he blames oil speculators for high gas prices, which are now double what they were two years ago. Remember, that’s about the time President Obama took office. And, he says there is nothing that can be done in the short term to ease the pain at the pump.
With all due respect, Mr. President, there is something you could do to ease the pain at the pump. Namely, declare and implement a “drill here drill now” strategy. And remove the ridiculous restrictions on shale oil deposits available out west.
The very speculators you are blaming for the run-up in gas prices would quickly retreat if they thought you were serious about an energy independence plan to maximize all of our existing natural resources. The problem is supply and demand, and expectations about the changes in those dynamics. That’s what drives gasoline prices at the pump.
It was recently reported by Fox News that the United States of America has the largest fossil fuel reserve in the world, due to the shale oil deposits discovered out west, plus the oil we have available in the Gulf of Mexico, Alaska and the outer continental shelf.
We have the energy resources to achieve energy independence if the government would just get out of the way. Unfortunately, government is the problem.
The Obama Administration has used the Gulf oil disaster of a year ago to limit oil exploration in the Gulf and elsewhere. As a result, the oil production in the Gulf is down 13 percent versus a year ago. That also means that there are a corresponding number of people out of work, who are denied productive and well-paying jobs.
We do not stop all commercial aircraft from flying when there is an airline tragedy. We do not stop all cars from driving on the highways when there is an unfortunate deadly automobile accident. No! We learn from those accidents and move on.
This administration’s propensity for moratoriums and prohibitions on oil and natural gas exploration right here at home is dramatically affecting the expectations about global supply and demand. It’s that simple.
Announcing a study group to determine if oil speculators are manipulating the market to drive up gasoline prices is ill-informed. It is a diversion from the real problem, which is the lack of a real energy independence plan.
When the president formed a jobs commission to make it appear that he was doing something about creating jobs, nothing happened. When he created a debt commission to address the spiraling national debt, nothing happened. In both instances, some ideas were put in a report, and then into a file cabinet somewhere.
We have seen and heard this rhetoric before. Announcing a study group does not solve the problem, and many informed observers doubt that the study group will find anything of substance. Gas prices are determined by supply, demand and normal market speculation.
A witch hunt is no substitute for common-sense actions.
Blame at the pump is no remedy for pain at the pump.