President Obama is about to play defense, for three years.
Nov 4, 2013, Vol. 19, No. 08
BY FRED BARNES
President Obama is facing the abyss. It’s that moment when a president’s plans are overwhelmed by his problems, and he’s relegated to playing defense for the rest of his White House term. Obama’s agenda already lingers near death. His poll numbers have slipped to new lows. His speeches are full of alibis and accusations.
Obama hasn’t reached the point of no return, but he’s close. His biggest problem is the collapse of Obamacare on its launching pad as the entire country watched. And there’s worse trouble ahead. More likely than not, Obamacare will be the dominant issue in the final three-plus years of his presidency. From that, there’s no recovery.
Years on defense—impotent years—have beset even the strongest of presidents. After the Iran-contra scandal broke in November 1986, the Reagan presidency was essentially over. He served two more years and made a triumphant trip to the Soviet Union, but his power was gone. The low point was the overturning of his veto of a highway bill.
Jimmy Carter’s presidency was hardly a powerhouse. Still, it had one shining moment, when the Camp David peace accord between Israel and Egypt was signed in September 1978. What clout Carter had vanished after the “malaise” speech in July 1979. It made him a target of ridicule.
Impeachment in 1998 forced President Clinton into retreat. His popularity remained high, but he abandoned an agenda that included entitlement reform. Even an unexpected Democratic victory in the midterm elections in his second term couldn’t revive his presidency.
In George W. Bush’s case, problems in his second term quickly engulfed his administration. The Iraq war became a bloodbath, his plan for overhauling Social Security had few takers, and he was blamed, unfairly, for the incompetent response to Hurricane Katrina. A troop buildup and adoption of a counterinsurgency strategy saved Iraq from disaster, but otherwise Bush’s second term was marked by futility.
Now, with his presidency in peril, Obama seems unprepared to avert paralysis. The failed startup of Obamacare, its website a “joke” in the view of 60 percent of America in a Fox News poll, caught the president by surprise. He refused to acknowledge the magnitude of the problem, conceding only that healthcare.gov wasn’t working as “smoothly as it was supposed to.” Neither is his presidency.
From all appearances, Obama sees the Obamacare mess as partly a political headache. A headline in Politico last week captured this: “White House works to flip Obamacare narrative.” It’s as if Obama and his advisers think they’re dealing with a faux pas to be smoothed over with political spin. Commentary’s Peter Wehner calls this attitude “detachment from reality.”
True, Obamacare will be a campaign issue in the 2014 midterm elections and no doubt a significant factor in the presidential election two years later. But that’s not because Obamacare is merely a matter of politics. It’s because Obamacare is now the official health care system for 310 million people and represents one-sixth of the American economy.
And it’s a national embarrassment whose troubles are only beginning. Unpleasant shocks loom for a majority of Americans who tap into Obamacare exchanges. Those 40 years of age and younger will discover next year their insurance premiums are “a lot higher than they would pay in today’s market,” says health care expert James Capretta. That will create a furor.
So, too, some lower-middle-income and middle-class Americans will find their access to doctors is limited. Why? Because many of the country’s biggest and best hospitals and some doctors have not agreed to take on this category of patients. Also, patients will be forced to endure longer waits as a result of a doctor shortage. In 2015 and 2016, the popular Medicare Advantage program will shrink.
Low-income folks and those with preexisting conditions will prosper under Obamacare. But how will middle-income Americans feel when they learn they’re paying considerably more for the same insurance? Not happy, I suspect. Or those under 30 who chose a “catastrophic-only” policy with high deductibles? They won’t be thrilled when told they are ineligible for a subsidy, whatever their income.
The point is that as Obamacare is rolled out over the final years of this presidency, there will be numerous occasions when Obama’s promises about the new health insurance scheme are exposed as untrue. If these incidents don’t provoke a crisis, they’ll at least keep Obamacare from fading as a prominent and fiercely debated issue.
And the president will pay a price. He’ll be stuck on defense, unable to change the subject. His agenda won’t help. A $9 minimum wage, universal preschool, immigration reform, global warming legislation, more infrastructure spending, higher taxes—there’s nothing close to a national consensus in support of these liberal leftovers.
Despite all this, Obama could escape a lost presidency. He has a loyal base that’s kept his approval rating in the low 40s. (Carter and Bush dipped into the 20s.) Democrats may be dreaming when they envision a 2014 election in which Republicans suffer badly from the shutdown. But it’s not inconceivable Republicans could lose the House, and their prospects of capturing the Senate are no better than 50-50. Then and only then, Obama’s presidency could be spared an early death and the nation’s attention shifted from a dreadful health plan named after him. That’s a nice scenario, but I’m not buying it. The humiliation of presiding over Obamacare’s debut won’t be soon forgotten.
But ponder this: Had Obamacare been created as a private enterprise with Obama as CEO, it wouldn’t have lasted a week. Not only would the stumbling company have been put out of business, so would its incompetent CEO. And we’d all—well, most of us—be better off.
Fred Barnes is an executive editor at The Weekly Standard.
Egypt has denied licenses to eight US-based non-profit groups, saying they violated the country’s sovereignty. Many states are concerned that foreign government-backed NGOs are really agents for their sponsors, rather than independent action groups.
Among the organizations banned from continuing their work in Egypt are the Carter Center for Human Rights, set up by former US President Jimmy Carter, Christian group The Coptic Orphans, Seeds of Peace and other groups.
Egyptian authorities warned that if the NGOs try to work without a license, Cairo would “take relevant measures”.
Local media speculate that the rejection may be temporary, and licenses could be granted later, after the presidential election due on May 23 and 24.
Monday’s move revives a crackdown by the Egyptian authorities on foreign-funded NGOs, which recently provoked a serious diplomatic row with long-term ally US. In late December 2011, security forces raided offices of a number of groups suspected of receiving money in violation of Egyptian legislation.
In February, prosecutors charged 43 people with instilling dissent and meddling in domestic policies following last year’s mass protests, which resulted in the ousting of President Hosni Mubarak. Among them were citizens of the US, Germany, Serbia, Norway and Jordan.
In March, an Egyptian court revoked the travel ban for 17 indicted Americans following Washington’s threat to withdraw $1.3 billion annual military aid to Cairo. The decision provoked a wave criticism of the ruling military council in Egypt. Many activists accused them of betraying national interests under American pressure.
But shortly after the suspected Americans left the country, Cairo’s prosecutors decided to target more people allegedly involved in the case, who were not in Egypt when the charges against their colleagues were made. Egypt asked Interpol to issue “red notices” for 15 NGO workers, including 12 Americans, two Lebanese and a Jordanian.
On Monday, Interpol’s French headquarters announced that the Egyptian request had been turned down, because it contradicted rules that strictly forbid the organization “to undertake any intervention or activities of a political, military, religious or racial character.”
Not so non-government
There may be a good reason why national governments in troubled countries mistrust US-funded NGOs. For instance, NATO’s intervention in Libya was partially justified by exaggerated reports of human rights organizations alleging that Muammar Gaddafi’s forces committed crimes against humanity and breached international law in other ways, reports RT’s Maria Portnaya. After the war some of them admitted to giving ungrounded reports.
Powerful NGOs like Human Rights Watch or Amnesty International are supposed to be objective monitors and not take sides, but in reality they “enter into an excessively cozy relationship with for example the United States government, but also other powerful Western allies, over Libya and over other issues,” John Laughland from the Institute of Democracy and Cooperation told RT.
This is what happened in Libya and is now happening in Syria, he added.
“The equivalent, if you like, of the Libyan League of Human Rights, which is called the Damascus Centre for Human Rights, has played exactly the same role. They’ve alleged crimes against humanity. They’ve called for safe havens, and armed intervention in that country. And they are quite clear political lobbyists, who are trying to secure a military intervention against Syria along the lines of the one approved last year against Libya,” Laughland explained.
Another example is the group behind the Kony 2012 initiative. The California-based NGO Invisible Children is calling to stop the use of child soldiers and is promoting peace in the Ugandan civil war. But the same organization provided Uganda’s authorities with intelligence that led to the arrest of several regime opponents, as a US embassy cable published by WikiLeaks revealed.
“I’m willing to believe that was not the one time that Invisible Children provided information to the Ugandan authorities. What else do we not know, in terms of their relations with the Ugandan Government?” asks Milton Allimadi, Editor-in-chief of the Black Star News.
The viral video calling on a campaign to stop Joseph Kony’s Lord’s Resistance Army appeared just months after President Obama decided to send 100 US military advisors to the region to help local governments remove Kony “from the battlefield”. Some human rights organizations criticized the move, saying among those receiving American aid is South Sudan’s People’s Liberation Army, which is known to exploit child soldiers just like Kony does.
NGOs are not currently held accountable for the information they publish, no matter how much collateral damage false facts may cause. Critics say some of those organizations actually pave the way for conflict rather than advocating peaceful solutions.
- Egypt Denies 8 US NGOs Permission to Operate in Country (voanews.com)
- Breaking news: the Bahrain Centre for Human Rights – MEA 2012 nominee (thoolen.wordpress.com)
- US is inciting Unrest through NGOs working under the cover of Human rights & Democracy in Egypt (jafrianews.com)
- US warns Egypt over detained NGO workers – CBS News (cbsnews.com)
Posted on January 27, 2012 at 6:40 am by Dan X. McGraw
President Barack Obama has gotten an earful from Republicans and energy industry officials for claiming his administration has helped to spur a rise in oil and natural gas production.
So who’s right?
For industry folks, it isn’t exactly what you imagine, but Rapier says the graph doesn’t paint the clearest picture of who is responsible for driving production of oil and natural gas.
“The reason that oil production has risen under President Obama is due to events that happened years earlier. In this case, it wasn’t some grand initiative that President Bush passed, rather it was years of steadily increasing oil prices that caused oil companies to approve a number of new projects that had marginal economics at lower oil prices. But these projects take some years to build, and as in the case of the Alaska Pipeline, decisions that were made (four to six) years earlier benefited President Obama with increased domestic oil production.”
- Oil, gas industry opposes use of word ‘fracking’ for method 1/27/12
- Looking for work? Click here to see job openings 1/27/12
- Steffy: President needs a dose of energy reality 1/27/12
- Cloudy Europe outlook depresses P&G 1/27/12
- Shell president says federal permitting may have turned the corner 1/27/12
27 October 2011 By Our Reporter
In our yesterday’s story, “NEW PLOT TO OVERTHROW MUSEVENI LEAKS”, we informed you of an American billionaire George Soros who reportedly has interests in Uganda’s oil and who funds civil society organizations and opposition parties to bring down President Museveni’s government.
We have now established more information on billionaire George Soros ;
Soros sits on the executive board of an influential “crisis management organization” that recently recommended the U.S. deploy a special advisory military team to Uganda to help with operations and run an intelligence platform, a recommendation Obama’s action seems to fulfill.
The president emeritus of that organization, the International Crisis Group, is also the principal author of “Responsibility to protect,” the military doctrine used by Obama to justify the U.S.-led NATO campaign in Libya.
Soros’ own is one of only three nongovernmental funders of the Global Centre for Responsibility to Protect, a doctrine that has been cited many times by activists urging intervention in Uganda. Institute
Authors and advisers of the Responsibility to Protect doctrine, including a center founded and led by Samantha Power, the National Security Council special adviser to Obama on human rights, also helped to found the International Criminal Court.
Several of the doctrine’s main founders also sit on boards with Soros, who is a major proponent of the doctrine.
Soros also maintains close ties to oil interests in Uganda. His organizations have been leading efforts purportedly to facilitate more transparency in Uganda’s oil industry, which is being tightly controlled by the country’s leadership.
Soros’ hand in Ugandan oil industry
Oil exploration began in Uganda’s northwestern Lake Albert basin nearly a decade ago, with initial strikes being made in 2006.
Uganda’s Energy Ministry estimates the country has over 2 billion barrels of oil, with some estimates going as high as 6 billion barrels. Production is set to begin in 2015, delayed from 2013 in part because the country has not put in place a regulatory framework for the oil industry.
A 2008 national oil and gas policy, proposed with aid from a Soros-funded group, was supposed to be a general road map for the handling and use of the oil. However, the policy’s recommendations have been largely ignored, with critics accusing Ugandan President Yoweri Museveni of corruption and of tightening his grip on the African country’s emerging oil sector.
Soros himself has been closely tied to oil and other interests in Uganda.
In 2008, the Soros-funded Revenue Watch Institute brought together stakeholders from Uganda and other East African countries to discuss critical governance issues, including the formation of what became Uganda’s national oil and gas policy.
Also in 2008, the Africa Institute for Energy Governance, a grantee of the Soros-funded Revenue Watch, helped established the Publish What You Pay Coalition of Uganda, or PWYP, which was purportedly launched to coordinate and streamline the efforts of the government in promoting transparency and accountability in the oil sector.
Also, a steering committee was formed for PWYP Uganda to develop an agenda for implementing the oil advocacy initiatives and a constitution to guide PWYP’s oil work.
PWYP has since 2006 hosted a number of training workshops in Uganda purportedly to promote contract transparency in Uganda’s oil sector.
PWYP is directly funded by Soros’ Open Society as well as the the Soros-funded Revenue Watch Institute. PWYP international is actually hosted by the Open Society Foundation in London.
The billionaire’s Open Society Institute, meanwhile, runs numerous offices in Uganda. It maintains a country manager in Uganda, as well as the Open Society Initiative for East Africa, which supports work in Kenya, Tanzania and Uganda.
The Open Society Institute runs a Ugandan Youth Action Fund, which states its mission is to “identify, inspire, and support small groups of dedicated young people who can mobilize and influence large numbers of their peers to promote open society ideals.”
Soros group: Send military advisors to Uganda
In April 2010 Soros’ International Crisis Group, or ICG, released a report sent to the White House and key lawmakers advising the U.S. military run special operations in Uganda to seek Kony’s capture.
The report states, “To the U.S. government: Deploy a team to the theatre of operations to run an intelligence platform that centralizes all operational information from the Ugandan and other armies, as well as the U.N. and civilian networks, and provides analysis to the Ugandans to better target military operations.”
Since 2008 the U.S. has been providing financial aid in the form of military equipment to Uganda and the other regional countries to fight Kony’s LRA, but Obama’s new deployment escalates the direct U.S. involvement.
Soros sits in the ICG’s executive board along with Samuel Berger, Bill Clinton’s former national security advisor; George J. Mitchell, former U.S. Senate Majority Leader who served as a Mideast envoy to both Obama and President Bush; and Javier Solana, a socialist activist who is NATO’s former secretary-general as well as the former foreign affairs minister of Spain.
Jimmy Carter’s national security advisor, Zbigniew Brzezinski, is the ICG’s senior advisor.
The ICG’s president emeritus is Gareth Evans, who, together with activist Ramesh Thakur, is the original founder of the Responsibility to protect doctrine, with the duo even coining the term “responsibility to protect.”
Both Evans and Thakur serve as advisory board members of the Global Center for the Responsibility to Protect, the main group pushing the doctrine.
As WND first exposed, Soros is a primary funder and key proponent of the Global Centre for Responsibility to Protect.
Soros’ Open Society is one of only three nongovernmental funders of the Global Centre for the Responsibility to Protect. Government sponsors include Australia, Belgium, Canada, the Netherlands, Norway, Rwanda and the U.K.
Samantha Power, Arafat deputy
Meanwhile, a closer look at the Soros-funded Global Center for the Responsibility to Protect is telling. Board members of the group include former U.N. Secretary-General Kofi Annan, former Ireland President Mary Robinson and South African activist Desmond Tutu. Robinson and Tutu have recently made solidarity visits to the Hamas-controlled Gaza Strip as members of a group called The Elders, which includes former President Jimmy Carter.
WND was also first to report the committee that devised the Responsibility to Protect doctrine included Arab League Secretary General Amre Moussa as well as Palestinian legislator Hanan Ashrawi, a staunch denier of the Holocaust who long served as the deputy of late Palestinian Liberation Organization leader Yasser Arafat.
Also, the Carr Center for Human Rights Policy has a seat on the advisory board of the 2001 commission that originally founded Responsibility to Protect. The commission is called the International Commission on Intervention and State Sovereignty. It invented the term “responsibility to protect” while defining its guidelines.
The Carr Center is a research center concerned with human rights located at the Kennedy School of Government at Harvard University.
Samantha Power, the National Security Council special adviser to Obama on human rights, was Carr’s founding executive director and headed the institute at the time it advised in the founding of Responsibility to Protect.
With Power’s center on the advisory board, the International Commission on Intervention and State Sovereignty first defined the Responsibility to protect doctrine.
Power reportedly heavily influenced Obama in consultations leading to the decision to bomb Libya, widely regarded as test of Responsibility to protect in action.
In his address to the nation in April explaining the NATO campaign in Libya, Obama cited the doctrine as the main justification for U.S. and international airstrikes against Libya.
Responsibility to Protect, or Responsibility to Act, as cited by Obama, is a set of principles, now backed by the United Nations, based on the idea that sovereignty is not a privilege, but a responsibility that can be revoked if a country is accused of “war crimes,” “genocide,” “crimes against humanity” or “ethnic cleansing.”
The term “war crimes” has at times been indiscriminately used by various United Nations-backed international bodies, including the International Criminal Court, or ICC, which applied it to Israeli anti-terror operations in the Gaza Strip. There has been fear the ICC could be used to prosecute U.S. troops who commit alleged “war crimes” overseas.
- Why U.S. military in Uganda? Soros fingerprints all over it (mb50.wordpress.com)
- Obama’s Uganda Gambit to serve Soros (mb50.wordpress.com)
- Who’s Behind Obama’s New War in Uganda? (fellowshipofminds.wordpress.com)
- Uganda: Minister aims to present oil bills this year (mb50.wordpress.com)
- Soros’ ICG recommended that the US “deploy a team” to Uganda (bokertov.typepad.com)
By: Reps. Mike Pompeo, R-Kan., Jeff Flake R-Ariz. 09/13/11 8:05 PM
By spurring development of the politically favored alternative fuel of the moment, devotees of federal energy subsidies say that we can stop sending dollars overseas. Details of the Solyndra scandal continue to unfold, but what we know so far should teach the Obama administration a valuable lesson: The government should not be in the business of picking winners and losers.
Unfortunately, some conservatives — trying to promote national security — fall into the same trap of arguing for alternative energy subsidies. Interests ranging from solar to wind, from propane to biodiesel, from natural gas to algae, purport to provide the key to America’s energy and national security needs, but having the president or Congress pick winners and losers in the energy sector is neither practical nor principled.
We can agree that having less oil imported from the Middle East would improve America’s national security interests. But we also agree with the chairman of the Joint Chiefs of Staff, Adm. Mike Mullen, who said, “Our national debt is our biggest national security threat.” In 2009 alone, the government gave more than $18 billion in handouts to a wide variety of energy sources, including wind, hydrogen, natural gas, oil and ethanol. With the federal debt estimated to hit $25 trillion by 2021, the United States must get its financial house in order. It cannot continue throwing billions of taxpayer dollars away on federal energy subsidies.
Not only are subsidies that try to artificially inspire a market for a given product unaffordable, they simply aren’t effective. Subsidy policy toward the renewable and alternative fuels industry has been tried for more than three decades — from President Carter‘s Synfuels Corp. in the early 1980s to President Obama’s Solyndra just this year — and it has failed.
Alternative energy producers often say they are just five years of handouts away from being viable on their own. But when those five years are up, these same folks come back for more because customer demand alone will not support any industry that depends on government handouts. It’s precisely this phenomenon that led President Reagan to observe that “nothing is so permanent as a temporary government program.”
With federal subsidy policy failing, how can we make U.S. energy policy reflect our national security interests? First, we must lift the de facto moratorium on domestic energy exploration — off the Gulf Coast, on the Outer Continental Shelf, and elsewhere. Second, we must remove regulatory burdens, such as the threat that the Environmental Protection Agency will halt hydraulic fracturing. And finally, we have to stop wasting taxpayer dollars on energy sector subsidies.
Phasing out market-distorting energy subsidies (and preventing the expansion or creation of new ones for the “latest, greatest” technology) must be part of the strategy. Subsidies such as fuel tax credits for ethanol, hydrogen and natural gas are set to expire soon. There is no reason to pile on our debt while simultaneously distorting the market for fuel products. It is far better to allow market competition to determine which alternative energy sources will succeed.
Although subsidy seekers argue that the Organization of Petroleum Exporting Countries‘ dominant position in the world oil market means that government intervention in the energy marketplace is warranted, that logic is flawed. If collusion by the OPEC cartel really boosts the price of oil artificially high, then alternative fuels should have an easier time competing against it without a subsidy. In fact, the constant pursuit of federal tax subsidies keeps some private capital on the sidelines that would otherwise be invested in alternative energy.
Looking at our energy policy through a national security lens only strengthens the argument for relying on free-market solutions. As the Solyndra example demonstrates, the stakes are simply too high to cast aside the single best arbiter of capital allocation in human history — the free market — in favor of misguided central planning via government mandate.
04/26/11 7:02 PM By: George Allen
In answering a college student’s question about high gas prices last week at Northern Virginia Community College, President Obama told Americans he believes the only real way to reduce our energy costs is to spend money on research and development of clean-energy technology.
Well guess what, Mr. President, America is blessed with the most plentiful energy resources in the world – right here under our land and water. If we are serious about saving family’s money and reducing dependence of foreign oil, what we ought unleash and utilize our resources cleanly and creatively for American jobs, quality of life, balance of trade and national security.
Sadly, the president and his liberal allies in Washington seem more concerned about tilting at intermittent, expensive windmills and throwing up bureaucratic roadblocks to using our American resources than the crippling impact of high energy costs on Virginians and Americans already struggling to keep afloat in a slow economy. These counterproductive policies are taking America down a path that is deeply flawed, unrealistic, harmful, and downright dangerous.
By almost every measurable indicator, the Obama Administration has launched a full-scale assault on conventional fuels – whether it is the EPA advancing the “train wreck” of draconian regulations affecting all facets of the energy that powers our lives and livelihoods, the Interior Department’s stalling effort to cut off access to Gulf of Mexico oil by withholding drilling permits, the substantial increase in bureaucratic red tape that has diminished productive activity, or the president’s termination of Yucca Mountain as a nuclear waste repository.
Such actions have led companies to question building of new coal and nuclear plants. Meanwhile, wind and solar power technologies remain costly and years away – if ever – from widespread use, despite the tens of billions the U.S. Department of Energy has spent on renewable energy technologies since 1978, when Jimmy Carter was in the White House. All of which foreshadows a future of higher energy costs for American families and businesses, and increased – not decreased – dependency on foreign oil.
The good news is America’s energy future does not have to be bleak. Fortunately, there are achievable solutions to lower fuel costs for American families and businesses and take control of our own energy destiny with practical conservation and innovation as well as production.
First we should produce our own oil – from Alaska to the Gulf of Mexico to resources off the shore of willing coastal states. Virginia has been trying to move forward for six years.
But even with the expiration of the legislative moratorium, the Obama Administration is blocking lease sales for exploration for oil and gas off Virginia’s coast and the rest of the Atlantic coast.
Second, we ought to feel fortunate that we are the “Saudi Arabia of coal” three times over and focus our creativity on finding ways which deliver clean, affordable power for our homes and businesses.
Even if we pursue innovative alternatives like battery technology for ground transportation, then the affordable, reliable electricity that will be needed to charge those batteries which can be supplied by plentiful coal from the Appalachian Mountains to the West.
Third, if we view natural gas as a key component of our energy strategy – and we should – then the sensible policy is to allow natural gas and coal-bed methane production from Virginia and abundant shale gas to be tapped and developed throughout America from the Appalachians in Pennsylvania to Louisiana to the high plains.
The simple truth is that we have the resources under our land and water. What we need is to remove the self-imposed barriers to safe and responsible production of American energy from American resources.
That, Mr. President, is how we will help families and businesses from skyrocketing gas and diesel prices, generate new jobs for Americans and new revenue for the U.S. Treasury, and ensure energy freedom for the United States of America.
San Ramon, Calif.
It’s the day after President Obama delivered his most recent vision of America’s energy future, and I’m sitting in the sunny corporate offices of Chevron, the country’s second-largest oil company. Let’s just say John Watson has a different view.
The Chevron CEO is a rare breed these days: an unapologetic oil man. For decades—going back to Jimmy Carter—politicians have been peddling an America free of fossil fuels. Mr. Obama has taken that to an unprecedented level, closing off more acreage to drilling, pouring money into green energy, pushing new oil company taxes, instituting anticarbon regulations. America is going backward on affordable energy, even as oil hits $110 a barrel.
Enter the tall, bespectacled Mr. Watson, who a little more than a year ago stepped into the shoes of longtime CEO David O’Reilly. An economist by training, soft-spoken by nature, the 53-year-old Mr. Watson is hardly some swaggering wildcatter. Yet in a year of speeches, he has emerged as one of the industry’s foremost energy realists. No “Beyond Petroleum” (BP) for him. On energy, he says, America “has a lot to learn.”
Starting with the argument—so popular among greens and Democrats—that we are running out of oil. “Peak oil”—the theory that global oil production will soon hit maximum levels and begin to decline—is a favorite among this crowd, and it is one basis for their call for more biofuels and solar power. Mr. Watson doesn’t dismiss the idea but explains why it remains largely irrelevant.
In theory, he says, “we’ve been running out of oil and gas for a long time,” yet technology creates new opportunities. Mr. Watson cites a Chevron field long in decline down the road in Bakersfield—to the point that for every 100 barrels of oil “in place,” the company was extracting only 10 or 20. But thanks to a new technology called steam flooding, Chevron is now getting 70 to 80 barrels. “Price creates incentive, and energy will be developed if there’s demand for it at the price you can develop it,” Mr. Watson says. In that sense, “oil and gas are plentiful.”
Don’t believe it? Over the past 30 years, even as “peak oil” was a trendy theme, the world’s proven reserves of oil and natural gas increased 130%, to 2.5 trillion barrels.
Or consider America’s latest energy innovation: hydrofracking for abundant and cheap natural gas. This advance, says Mr. Watson, took even the industry “by surprise”—as evidenced by the many U.S. ports to import liquid natural gas that are now “sitting idle.” Chevron last year paid $3.2 billion to buy natural-gas producer Atlas Energy as its foray into this new market.
Mr. Watson has little time for the Beltway fiction that America will soon be able to do without, or nearly without, fossil fuels. Yes, “we need all forms of energy.” But the world consumes 250 million barrels of energy equivalent today, only a “tiny fraction of which” is wind and solar—and even those “are not affordable at scale,” he says.
As for biofuels, “we would need to consume land the size of states” to hit the country’s current ethanol targets. Chevron is investigating biofuels, but Mr. Watson says the “economics aren’t there” yet. Unlike many CEOs, Mr. Watson insists on products that can prosper without federal subsidies, which he believes are costly and lacking in transparency when “consumer pockets are tight, government pockets are tight.”
Bottom line: “We’re going to need oil and gas and coal for a long time if America wants to keep the lights on.”
He seems to mean it, too: Chevron recently announced the largest capital and exploratory budget in its history, $26 billion to drill in Australia, Western Africa and the Gulf of Thailand, among other places. Some of that cash will go to the Gulf of Mexico, though Mr. Watson wishes there were more U.S. opportunities.
“Most of the well-developed world—Australia, Western Europe—they develop their resources base, they inventory it, they develop it, and they view it as a good source of jobs and revenue,” he says. The U.S.? “We are a country” that for too long has taken “affordable energy for granted.”
The Chevron exec was “pleased” to see Mr. Obama acknowledge that “oil and gas were fuels of the future—because I hadn’t heard that before. That’s a significant step.” Looking to reassure Americans about rising gas prices, the president nonetheless resorted to the old standby of calling for a one-third reduction in U.S. oil imports by 2025. Mr. Watson thinks that’s a fine goal, but he points to the enormous disconnect between what the president is proposing and existing policies.
The only conceivable way to meet that goal is by dramatically increasing U.S. oil production—immediately. The White House recently bragged that last year American oil production hit its highest levels since 2003. What it failed to mention is that it takes years for leases to start producing, so credit for last year’s surge goes to the Bush administration.
But what about the BP Gulf spill? Mr. Watson blames the “cultural aspects and behavioral aspects” of the particular drilling rig that exploded. He roundly disagrees with the finding of Mr. Obama’s spill commission that the “root causes” of the spill were “systemic” to the industry.
“There is no evidence to support that. I don’t know how that conclusion was reached. I know the industry has drilled 14,000 deep water wells without having this sort of problem.” As for the moratorium, “I can understand taking a pause. I can’t understand shutting down a whole industry for a better part of a year.”
Chevron has three deep water rigs in the Gulf, so the ban cost it millions of dollars in idle rigs and lost jobs. For the country, says Mr. Watson, it means “less oil.” Offshore drilling takes years of lead time. Mr. Watson cites Chevron’s Gulf “Tahiti” project, which started producing about 18 months ago. It has taken “the better part of a decade to do the seismic work, drill the exploratory wells, evaluate those wells, drill other development wells, to delineate it, to build the facilities and to place the oil wells online,” he explains.
The endless moratorium has already meant that “if you go out to the middle of the decade, there are already 200,000 to 300,000 barrels a day of oil that aren’t going to be produced that year. . . . That won’t be retrieved.” And the lost production number is getting larger, since the new Bureau of Ocean and Energy Management is still dallying on permits—and those primarily for backlogged projects, not new leases.
Democrats are now arguing, as Mr. Obama did in his speech, that the oil industry already “holds tens of millions of acres of leases where it’s not producing a drop.” Some are advocating “use it or lose it,” calling for the government to strip oil companies of their leases if they don’t immediately start producing.
Mr. Watson explains why this is bogus. Only one-third of Chevron’s offshore leases are classified as “producing” oil and gas today. The other two-thirds either are “unsuccessful” (they don’t hold viable oil or gas) or “are in varying stages of development—seismic work, drilling wells, constructing facilities.” Mr. Watson says companies would be crazy to sit on productive lands, since leases require costly bonus payments and annual rental payments to the government.
If Washington institutes Mr. Obama’s “use it or lose it” policy, Mr. Watson says, it will mean less U.S. oil production. And how does this help Mr. Obama with his goal of reducing imported oil?
As for soaring oil prices, Mr. Watson blames growing demand, tighter supply, Mideast uncertainty and inflation. He doesn’t predict future price trends, though during a recent analyst call he warned that the drilling moratorium would only make them higher. Lost production in the Gulf is “going to represent a sizable chunk of the spare capacity that the industry expects to see. And that will impact prices, and that will retard economic growth.”
The economy is also why Mr. Watson won’t pay the usual energy CEO lip service to new carbon regulations. The cap-and-trade bill the House passed in 2009 was “poorly conceived and it collapsed under its own weight for good reason,” he notes.
The EPA move to regulate carbon is no better: “It’s not why the Clean Air Act was put in place, and it doesn’t seem to be the right way to attack concerns about greenhouse gas emissions,” he says. The EPA is “placing huge new regulatory burdens on industries that are import sensitive.” The regulations will place burdens on refineries, putting “their competitiveness at risk, and ultimately we’ll produce less gasoline here and end up importing it from refineries that are less energy efficient overseas.”
Mr. Watson says Americans can accomplish a great deal with “affordable conservation.” And “a wealthy economy,” he adds, “is better able to deal with the costs of greenhouse gas abatement than a poor economy.” Since “large numbers” of countries are “unlikely to take aggressive action on greenhouse gas emissions,” the “U.S. is going to have to decide, just as California is going to have to decide, if they want to go it alone. . . . Are they willing to place the burden on our economy and our consumers, at the expense of jobs?”
That pretty much sums up the broader choice America faces on energy policy. It can listen to the Washington siren song on alternative energy, pouring scarce dollars into green subsidies, driving up the cost of energy, and driving out U.S. manufacturing and jobs. Or it can embrace our own fossil fuel resources, which are cheap and plentiful.
“What I see are people who want affordable energy,” says Mr. Watson. “They want strong environmental standards—they want a lot of things—but first and foremost they want affordable energy. And if you want affordable energy, you want oil, gas and coal.”
Ms. Strassel writes the Journal’s Potomac Watch column.
( Original Article )