At this State of the Union address, President Obama proudly stated that “American oil production is the highest it’s been in eight years” and declared that his Administration would “open more than 75 percent of our potential offshore oil and gas resources.” While President Obama spoke favorably of the role that oil and gas development play in America, the President’s and his Administration’s actions don’t match with his words.
There are several areas where the President and his Administration are unreasonably hindering access to more oil and gas for Americans and threatening the industry with punitive measures:
- Keystone permit rejection. The Keystone XL pipeline would deliver oil from our Canadian ally, relieve some of the pain of high prices at the gas pump, and create jobs in America. Nevertheless, and despite a State Department environmental review concluding that the project poses no significant environmental risk, the President chose to reject TransCanada’s permit application to build the pipeline.
- Targeted tax hikes. The President continues to threaten the oil industry with targeted tax hikes. Under the rhetoric of eliminating subsidies for the industry, the President’s proposal would eliminate certain tax treatments for oil that are available to many industries, effectively singling out the oil industry for a tax hike.
- Slowdown of production on federal lands. While American oil production has been increasing, the vast majority of that production is taking place on private lands. Production on federal lands is actually 40 percent lower than it was 10 years ago. The House Natural Resources Committee also reports that under the Obama Administration, 2010 had the lowest number of onshore leases issued since 1984.
- Fracking regulation. Hydraulic fracturing (or “fracking”) is a proven oil and gas extraction process that should not be subject to overly burdensome regulations. The Environmental Protection Agency is currently considering federal regulation of the fracking process under the Safe Drinking Water Act. The problem is that the agency is following a procedure that even the Department of Energy criticized for its “selective focus” on “negative outcomes.”
Words alone will not make energy more abundant and affordable, nor will they create the energy-related jobs that would make the American economy stronger. If the President is truly concerned about increasing America’s energy access, he certainly has a funny way of showing it.
For policies in that direction, Heritage policy analyst Nick Loris explains in two papers how to make gas and electricity prices more affordable and how to create jobs and raise government revenue through energy exploration.
- Natural gas sector set up by Obama to be sabotaged? (mb50.wordpress.com)
- Obama loves oil – Not! (mb50.wordpress.com)
- No energy industry backing for the word ‘fracking’ (mb50.wordpress.com)
- Is President Barack Obama responsible for U.S. oil production rise? (mb50.wordpress.com)
Industry insiders fear rules, taxes
By Ben Wolfgang–
President Obama spoke of the role natural gas must play in America’s energy future during his State of the Union address last week, but industry insiders fear it’s merely lip service designed to distract from what they consider the administration’s behind-the-scenes plan to sabotage the sector.
“They’re trying to make it more difficult for the industry to survive while the president is standing in front of the country saying we’re going to create jobs through hydraulic fracturing,” said Ken von Schaumburg, former deputy counsel at the Environmental Protection Agency during the Bush administration.
At the same time the president boasts of the nation’s vast shale gas deposits, his EPA is poised to make extracting that fuel much more difficult. The agency will this year release a widely anticipated study on hydraulic fracturing, or “fracking,” the use of water, sand and chemical mixtures to crack underground rock and release huge quantities of gas. The practice is widely used in Pennsylvania, North Dakota and other states, and has helped revitalize small-town economies and led directly to the creation of thousands of jobs in recent years.
Many in the gas industry fear that the upcoming EPA study will call for harsh new regulations on the process, and many environmental groups – a key constituency for Mr. Obama during this year’s re-election bid – are publicly pushing the administration to outlaw fracking entirely.
The EPA has already dealt a severe blow to fracking with the release of a report last year alleging the process was responsible for water contamination in Pavillion, Wyo. That study was met with ridicule from across the natural gas business because it was put out before being subjected to an independent, third-party review. While the EPA has promised such an unbiased look will be conducted, the study has likely already had a negative impact on the public perception of fracking.
Possibly making matters worse, Mr. Obama has over the past week repeated his calls for increased federal investment in the renewable energy sector, a policy some view as an effort to stack the deck against natural gas.
“Job creators and American consumers should welcome the president’s latest energy promises with suspicion,” Thomas Pyle, president of the nonprofit Institute for Energy Research, said in a statement following Mr. Obama’s State of the Union speech, during which he called for an “all-of-the-above” approach toward energy independence that relies heavily on American oil and gas reserves.
“In the same breath that he extolled the virtues of natural gas development and called for higher energy taxes on the companies that produce it, President Obama continues to press for more taxpayer subsidies for Solyndra-style green energy companies,” Mr. Pyle said.
Mr. Obama’s positive rhetoric toward natural gas could also represent a desire to please both sides of the debate, though the move to the middle has, thus far, seemed to satisfy no one. After the speech, environmental groups blasted the administration for being too timid and called for an all-out war on fracking.
“We can’t wait much longer for the clean energy revolution. We need to clean up a fossil fuel industry run amok, by ensuring … natural gas safeguards that go much further than what the president suggested,” Sierra Club Executive Director Michael Brune said in a statement after the State of the Union address.
So far, however, the administration has stopped far short of what the Sierra Club and other liberal groups want to see. Mr. Obama did, however, call for legislation requiring any company drilling on public land to disclose all chemicals used during the fracking process. Several states, such as Texas and Colorado, have already passed disclosure bills, and many leading companies voluntarily post detailed breakdowns of their chemical mixtures to the website fracfocus.org, an online clearinghouse.
Potential state or federal regulations aren’t they only problems confronting the gas industry. The explosion of natural gas extraction in areas like the Marcellus Shale region has glutted the market, keeping prices low for consumers but leading to diminished returns for drilling companies.
Last week, Chesapeake Energy, one of the largest players in the game, announced plans to reduce daily gas production by 500 million cubic feet, an 8 percent drop. The firm said it’s considering slashing production even further and predicts “flat or lower total natural gas production in the U.S. in 2012” as supply outstrips demand.
- Obama loves oil – Not! (mb50.wordpress.com)
- Cabot Cites Obama Speech to Fault EPA’s Dimock Fracking Probe (junkscience.com)
- No energy industry backing for the word ‘fracking’ (junkscience.com)
This Tuesday, when President Obama delivers his State of the Union Address, we can count on it to be filled with the same platitudes, anecdotes, false promises, cooked stats and tenuous connection with reality we find in everything the man does. It will be a laundry list of progressive fantasy, couched in populist rhetoric and designed to make middle-class Americans think he has something more than the zero connection and concern for them he has.
President Obama doesn’t give a damn about the middle class, jobs, the economy or much of anything that distracts from his progressive agenda. But what do you expect from someone who shows such contempt for the nation’s pastime as to wear “mom jeans” when throwing out the first pitch at the All-Star game?
I’m kidding about “mom jeans,” of course, though only mostly. But about the contempt…not at all.
Last week President Obama went to Disney World – returning to his home country of Fantasy Land to deliver a speech about the need to boost tourism. Tourism is hurting, there’s no doubt about that. But taking a vacation is hardly a priority when you’re unemployed, and for the unemployed, Mr. Obama smacked them across the face with a dead fish.
The administration announced he would block the Keystone XL pipeline, a plan to move oil from Canada to refineries on the Texas Gulf Coast. The green left hates it because…well, it’s real energy rather than the “green” energy racket they love to milk for government subsidies. If it’s good for humans, you can count on these people to oppose it unless they’re lining their pockets with tax dollars or preparing to profit from forced customer base through regulation.
The pipeline would have meant jobs, good jobs, lots of them … but it seems, as Vice-President Joe Biden so artfully put it, that three-letter word that is President Obama’s No.1 priority – J-O-B-S – isn’t as much a priority as pleasing the cronies he desperately needs for his reelection.
How many jobs? Conservatives say a lot; progressives say not so many. I’m no engineer, but trenches from Canada to the Gulf of Mexico don’t dig themselves, and that pipe won’t magically appear once it’s dug – nor will it maintain itself. So, more than 100 but less than the millions who have lost jobs since President Obama took office. But creating some jobs beats creating no jobs, which is what President Obama chose when he took the side of his “green” elite friends against normal American workers.
(Reuters) – President Barack Obama, offering a glimpse of next week’s State of the Union address, made clear on Saturday that he will deliver a starkly partisan election-year call for a “return to American values” of economic fairness.
“I’m going to lay out a blueprint for an American economy that’s built to last,” Obama said in a campaign video sent to supporters. “And most importantly, a return to American values of fairness for all, and responsibility from all.”
A reference to values is usually political code for social and religious issues, a rallying cry for conservative Republicans who want to deny the Democratic president a second White House term in November.
But Obama, who delivers his annual State of the Union address to Congress on Tuesday night, is running for re-election on his claim of being a champion for the middle class, while trying to paint Republicans as the party for the rich.
“We can go in two directions. One is towards less opportunity and less fairness. Or we can fight for where I think we need to go: building an economy that works for everyone, not just a wealthy few,” Obama said.
He is expected to use the speech to repeat calls for higher taxes on the wealthy, tax breaks to bring American manufacturing jobs home, steps to aid the housing market, and another nudge to China on currency flexibility to aid U.S. exports.
Republicans, who were holding a closely watched primary election in South Carolina on Saturday to help select their nominee to face Obama, say he is an old-fashioned tax-and-spend liberal whose policies hurt business and jobs.
Obama’s suggestions are therefore unlikely to make much headway in Congress, where Republicans control the House of Representatives.
Attacking congressional Republicans on their own turf, during a prime-time televised joint session of Congress, signals a de-emphasis on appeals for cooperation that have marked Obama’s previous State of the Union addresses.
Obama campaigned in 2008 on a message of reaching across the political aisle to change the way that Washington works, but now complains that Republicans have obstructed his efforts to collaborate and are only interested in seeing him fail.
Republicans say they oppose his policies because they view them as bad for the country, and say they are willing to work with the president on areas of genuine common ground.
Polls show Americans are fed up with gridlock in Washington, but tend to blame congressional Republicans more than the president for the state of affairs.
Obama said he would focus on American manufacturing “with more good jobs and more products stamped with Made in America,” American energy, and skills for American workers as key parts of his plans for the economy.
“They’re big ideas, because we’ve got to meet this moment. And this speech is going to be about how we do it,” he said.
He is expected to emphasize incentives to encourage lenders to refinance underwater mortgages, which would ease a crucial obstacle to a recovery in housing and the broader economy.
He has also said he will put forward tax breaks to reward companies that bring jobs home to the United States, while eliminating tax benefits that outsource jobs overseas, and has repeatedly stressed wealthy Americans should pay more in taxes.
Obama has proposed a so-called Buffett rule, named after the billionaire Warren Buffett, who supports the president and says it is unfair that he pays a lower tax rate than his secretary because most of his income is taxed as capital gains.
Mitt Romney, a top Republican contender to face Obama and one of the richest politicians to vie for the nomination, this week disclosed he paid a tax rate of around 15 percent, because most of his income comes from investments.
Republicans say Obama is playing the politics of envy and what Americans really care about is jobs.
Voters do rate the economy as one of the most important factors in the upcoming election, and while U.S. growth has picked up, it remains fragile and unemployment, at 8.5 percent, is still high by historical standards.
Obama departs on Wednesday for a five-state, three-day tour to promote the framework he will highlight in the address, including visits to Las Vegas and Denver that were hit hard in the housing downturn, and to Detroit, home to the U.S. auto industry that Obama helped rescue through a taxpayer bailout.
(Reporting By Alister Bull; Editing by Vicki Allen)