Friday, March 9, 2012

Obama's Big Oil Lie

In case you missed it, gas has gone over $6 per gallon in the U.S. now.  Not everywhere, of course, but a vast array of predictions say it'll happen in a lot of places by the time summer ends.  It shouldn't be a surprise, really, given that every energy-related policy the Obama administration has enacted in the past three years has contributed to driving up prices.

Take, for example, the Keystone XL Pipeline, a proposed plan to pump oil from Canada to the US.  It's a project that would create tens of thousands of American jobs while helping to keep gas prices down, and it's coming from an ally rather than a hostile Middle Eastern nation.  Of course, none of that is persuasive to the Obama administration, which killed the project after soliciting help from Democrats in the Senate to override Republican votes in support of it.

That's just one example of many, of course, and it shouldn't be at all surprising.  You see, Obama and his people have made it plain that they want higher energy prices.  Obama's hand-picked energy chief, Stephen Chu, stated that their objective is not to bring down gas prices at all:
“No, the overall goal is to decrease our dependency on oil, to build and strengthen our economy,” Chu replied. “We think that if you consider all these energy policies, including energy efficiency, we think that we can go a long way to becoming less dependent on oil and [diversifying] our supply and we’ll help the American economy and the American consumers.”
Given their actions on the Keystone XL Pipeline, it doesn't seem that he was being terribly honest about that whole decrease in dependency, either.  Recall, too, Chu's words from back in 2008:
“Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.”
And this isn't just a rogue administrator...Obama shares the same position.  Listen to his own words:

The latest excuse from the Obama administration is that they can't do much about it:
“We know there’s no silver bullet that will bring down gas prices or reduce our dependence on foreign oil overnight.”
I guess he means besides harnessing the raw power of algae and proper inflation of your tires, because he seemed pretty hip on those ideas when he proposed them.  Of course, his claim of the lack of a silver bullet isn't exactly true, either:

Erasing uncertainty is the #1 thing you can do as a national leader if you truly desire to lower gasoline prices. Not only could it change the psychology of energy investing, there is still time for companies to change their 2012 investment plans.
Below the fold is my humble 10-point plan: Things President Obama could (but won’t) do to reduce domestic gasoline prices by November 2012.
1.  Commit to a strategic goal of North American energy security. That includes reasonable and responsible domestic drilling. That includes taking the lead on the Keystone XL Pipeline; we could find a way to make it happen while addressing the legitimate environmental concerns of Nebraskans. It includes a commitment to maintaining the Trans-Alaska Pipeline System and opening ANWR.
2.  Ditch the anti-industry, anti-capitalist rhetoric. It is not the President’s or the government’s place to decide when an industry’s profitability is “high enough”. High oil company profits fund more drilling; more drilling means more future supply and lower prices. Besides, American oil companies are not owned by a cabal of wealthy executives, but by America’s pension funds, mutual funds and private investment accounts. “They” are “us”.
3.  Stop targeting the oil industry for punitive tax treatment. States such as Texas and Louisiana have production tax abatement programs that have successfully encouraged new drilling. If you don’t believe that the threat of increased taxes discourages drilling, just ask Governor Perry or Governor Jindal.
4.  Realize that Uncle Sam is in the energy business and is a partner in industry’s success. Oil and gas royalties are the federal government’s #2 source of revenue, after the income tax. Offshore slowdowns hurt not only industry and jobs, but government revenue.
5.  Recognize that industry does not need to be led by government; industry needs to be unleashed and encouraged to innovate. The resurgence of the domestic energy sector was rooted in the private sector, not matter how much President Obama and Dr. Chu would like to take credit for it. The growth in North Dakota, Pennsylvania and Texas happened in spite of the federal government, not because of it.
6.  Trust that no oil operator wants to be the “next BP”. The BP spill cost that company something on the order of $40 billion. Industry safety and environmental commitment is motivated more out of self-interest and less out of fear of the government. When it comes to federal regulation, the nation would be better served by Sheriff Taylor, not Barney Fife.
7.  Return offshore permitting to the pre-Macondo pace.  Your overreaction to the BP Spill has cost on the order of 500,000 barrels per day of domestic oil production from the Gulf of Mexico. The ridiculous “Worst Case Discharge” calculation as a routine part of offshore permitting is engineering malpractice, in my humble opinion. The professional staff of the Bureau of Safety and Environmental Enforcement is capable of reasoned regulation, but they currently operate in fear of their political masters.
8.  Declare hydraulic fracturing & well design to be the regulatory domain of the states, not the EPA. Geology and environment vary widely; Pennsylvania is not Louisiana is not North Dakota is not California. It is insanity to think that one broadly-applied set of rules can be applied to regulate industry without suffocating development.
9.  Rescind the recently-enacted royalty rate increase for new onshore Federal oil and gas leases. Secretary Salazar’s stated rationale for increasing the government’s take by a whopping 50% – from 12.5% to 18.75% of gross production – was to equate onshore royalties with the offshore royalty rate. That makes no sense. Higher royalties mean less drilling, poorer economics of production and premature abandonment of wells. Besides, anIHS-CERA Study recently showed that the federal government’s total take of offshore cash flows makes the Gulf of Mexico the second-most punitive fiscal regime in the world, after Hugo Chavez’s Venezuela. [Update: In keeping with the First Rule of Holes, rolling back the royalty rate increase may be the first thing the government should do if it is serious about reducing energy prices. - Ed.]10. Encourage development of a nationwide distribution system of natural gas as a transportation fuel. Natural gas is clean, abundant and nearly 100% domestic. Its potential as a transportation fuel has scarcely been tapped.

Yes, I'm aware that the Obama administration claims that domestic oil production is higher than ever.  That's not exactly the truth.  In fact, there are many untruths around energy prices that you probably haven't heard in the propaganda arm of the Democratic party media.  For example, they're once again trotting out a decades-old lie:

Gas prices shot up 18 cents on average nationwide over the past two weeks, according to the latest Lundberg survey. 
That puts the average cost of regular gas at $3.69 a gallon. Of course, many of you around the country are already paying over $4. 
President Obama, members of his administration, Democrats in Congress, and his allies on the left all make the same case: we can't "drill our way" out of this problem. 
They say we use a quarter of the world's oil, but only have 2% of the world's oil reserves. So, do the math. They say it's impossible, but here's how he gets to that mythical 2%. 
For simplicity, we'll call it Obama's big oil lie because that's what it is. 
They're only counting proven oil reserves. 
The truth is that 2% oil reserves figure is whatever the government says it is. 
Here’s the official definition from the non-partisan Congressional Research service. 
Proven reserves are: "certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions." 
The key word there is "existing" conditions. 
The U.S. has around 20 billion barrels in proven reserves, but the amount of undiscovered so called "technically recoverable" oil is over seven times that. 
Those are the government's own figures! 
And we can get that oil using today's technology. In fact, the U.S. has nearly 1.5 trillion barrels of oil. 
That's enough to fuel the present needs in the U.S. for around 250 years, according to the Institute for Energy Research. 
Former President of Shell Oil on FBN earlier today on how we could easily get back to producing 10 million barrels a day: 
"The best source for new oil is the world's largest consumer economy: this country. We could go back to 10 million barrels if we had the permitting that would enable it to happen. We have the oil. There is more oil in this country that we're not allowed to get at than oil we're allowed to get at.” 
But much of the oil is off limits thanks to the policies of this President:
-The outer Continental shelf.
-The Arctic National Wildlife Reserve in Anwar.
-And Shale Oil where the United States has the largest deposits in the world estimated by the government to be over 2 trillion barrels.
Even when the production is not in this country, the President will do anything he can to stop it, like blocking the Keystone pipeline. 
Also, what the President is refusing to acknowledge is the United States is in the middle of an oil boom thanks to new technology like deep-water drilling in the Gulf of Mexico. 
So the President needs to stop with the 2% lie. 
The solutions are right in front of us, but this administration flatly refuses to explore them.

Gas prices have doubled since Obama took office, and everything he does continues that trend.  Period.

This needs to be hammered, hammered, hammered by whoever the GOP nominee is.

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