Category — Obama energy policy
“The energy and economic welfare of the United States and Mexico are intertwined by our shared geography, geology, and peoples. The Transboundary Hydrocarbon Agreement will help to tie our countries together and grow our economies.”
- Daniel Simmons, Testimony before House Natural Resources Subcommittee on Energy and Mineral Resources, “U.S.-Mexico Transboundary Hydrocarbon Agreement and Steps Needed for Implementation,” April 25, 2013.
Mexico is America’s third largest trading partner and has been one of the largest sources of oil exports to the United States. Mexico is the largest recipient of U.S. gasoline exports and the second largest recipient of our natural gas exports.
The energy trade between the United States and Mexico is growing, especially for America’s finished petroleum and natural gas exports. Mexico’s heavy oil production is falling, but that means more spare refining capacity on the Gulf Coast if Canadian oil sands can be transported to the Gulf Coast.
The Gulf of Mexico is one of the most prolific hydrocarbon-producing areas for both the United States and Mexico. Oil production, especially in deepwater on the U.S. side of the border, has moved closer to the U.S.-Mexico maritime border in recent years. Until last year, however, there was no agreement on how to divide resources between the United States and Mexico for resources that straddle the border.
April 30, 2013 No Comments
“Industrial development would have been greatly retarded if sixty or eighty years ago the warning of the [coal]conservationists had been heeded. . . . [T]he internal combustion engine would never have revolutionized transport if its use had been limited to the then known supplies of oil. . . . Though it is important that on all these matters the opinion of the experts about the physical facts should be heard, the result in most instances would have been very detrimental if they had had the power to enforce their views on policy.”
- F. A. Hayek, The Constitution of Liberty (Chicago: The University of Chicago Press, 1960), pp. 369-70.
Government energy planning is a long tried, long failed exercise. The inner Obama in his Argonne speech last week surely channeled Jimmy Carter; and Carter circa 1977 foreshadowed the 44th president of the United States. And President Carter did not introduce the idea of federal energy planning either.
To make these points, consider the following ten quotations, four from Carter, four from Obama, and two from the U.S. Department of Interior in 1939. Can you tell which is which? (Answers at the end)
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March 19, 2013 2 Comments
Milton Friedman famously remarked: “Concentrated power is not rendered harmless by the good intentions of those who create it.” But how can good intentions be squared with an Administration that plunders our taxes, energy resources, and the overall economy to satisfy select businesses (wind, solar, ethanol, battery) and an anti-industrial elite? They win, while we the 98 percent lose.
It is time for more Americans to learn about the real energy boom that the Obama Administration is trying to keep under wraps in major and countless minor ways. From this basis, baronyism and cronyism can be exposed and then expunged.
Our North American Energy Boom
An oil and natural gas boom is underway in the United States, born of horizontal drilling and hydraulic fracturing, or “fracing.” It has created tens of thousands of well-paying jobs directly, and hundreds of thousands more in hundreds of businesses that supply and support the industry and its workers.
In North Dakota, the unemployment rate is 2.4 percent, in large part because of a huge increase in natural gas and crude oil production from deep shale rocks that yielded nothing prior to fracing. The new technology is also driving job growth, higher incomes, and increased tax revenues for hard-pressed state and local governments in Louisiana, Pennsylvania, Texas and other states.
Meanwhile, 350 miles north of Edmonton, Alberta, other innovators are producing billions of barrels from oil sands that stretch across an area the size of Utah. Shallow deposits are accessible via surface mining, while deeper lodes are tapped using in situ drilling and steam injection. As work is completed in an area, the land is restored to woodlands, grasslands, lakes and marshes, and the process moves on. [Read more →]
December 20, 2012 4 Comments
“America can continue paying billions in subsidies annually to finance “green” technologies and agenda-driven science. Or we can generate hundreds of billions a year in royalties and taxes, create millions of jobs, and rejuvenate our economy by applying commonsense regulation to the Big Three consumer-chosen energies–oil, gas, and coal.”
The United States is now Balkanized into five distinct voting blocs, notes Joel Kotkin (two blue, two red, one blue?red). Other political analysts see the nation bifurcating along “makers” and “takers” lines, while still others say 50.6% of the popular vote is hardly a mandate.
In any event, when American voters reelected President Obama, they also returned his wide-ranging agenda at the EPA, Interior, Energy, and Justice departments for “fundamentally transforming” our nation from its limited-government roots. And not in the name of sound science and realistic tradeoffs between market failure and government failure.
This won’t mean just ObamaCare, higher taxes on businesses and families, deficit spending, and tens-of-thousands of pages of new regulations. It will also bring more disputes over energy and environmental policies, the vanguard of Mr. Obama’s determined campaign to substitute so-called “green” energy for hydrocarbon energy.
This conflict will be fought primarily on six battlegrounds.
1. Carbon taxes
Hurricane Sandy presented another pretext for regulating and taxing hydrocarbons. No respectable climatologist or meteorologist believes atmospheric carbon dioxide conjured up the destructive storm, but climate alarmism has always been about political science, not real science. [Read more →]
November 19, 2012 3 Comments
[Editor Note: In "Speaking of Power" (October 2012), POWER editor-in-chief Robert Peltier takes issue with a recent analysis concluding that the EPA's new CO2 rule for powerplants was inconsequential. Since his editorial was published, it was reported that a second wave of CO2 powerplant regulations are in the works.]
Cato Institute senior fellows Jerry Taylor and Peter Van Doren suggest in a recent Forbes blog that the U.S. Environmental Protection Agency’s (EPA’s) carbon pollution standard for new coal-fired power plants (Standard) is a meaningless skirmish in President Obama’s “war on coal.” But while the Standard may have no tangible impact on the industry in the future, it has great strategic benefit to the administration.
Going from Facts …
The blog posting, “President Obama’s Alleged ‘War on Coal’—Climate Change Edition,” correctly assesses the situation: First, the EPA’s recently proposed Standard covers only new coal-fired power plants built 12 months after the Standard goes into effect, perhaps in 2014, probably in 2015. The Standard limits carbon emissions from new plants to those of a typical gas-fired combined cycle plant. Because any additional emissions must be captured and sequestered, building a new coal plant under the proposed Standard isn’t practical or economic. The result: There are no new coal-fired plants on the drawing board in the U.S. The EPA, as the authors correctly point out, counts perhaps 15 “transitional sources” (other sources list 22) that may still be constructed as “grandfathered” plants. Ironically, if no new coal plants are constructed, the Standard produces no CO2 reductions.
Second, the authors correctly note that the long-term price of natural gas is expected to remain low. As they say, the “futures price for natural gas in August 2012 (the farthest out that one can buy gas on the New York Mercantile Exchange) is $3.01 per million BTU.” Industry new construction has focused on gas-fired plants and wind turbines for the past few years. [Read more →]
November 6, 2012 3 Comments
“As the Democrats become more committed to, and defined by, a green agenda, and as they become dependent on money from high-tech venture capitalists and their lobbyists, it becomes harder to describe them as a party for the little guy — or liberalism as a philosophy of distributive justice.”
- Charles Lane, “Liberals Green-Energy Contradictions,” The Washington Post, October 15, 2012.
Governor Mitt Romney strongly supports North American energy independence as the foundation of renewed U.S. employment and prosperity. There is much needed to fill-in the blanks, but the challenger’s guiding philosophy promises real reform. Free-marketeers, playing defense for the last four years, and during a lot of the Bush Administration too, actually have a chance to play offense should Romney prevail.
Obama’s efforts are so counterproductive that old-school textbooks in Government and in Economics are under pressure to add a new term along side “market failure”–government failure. Long live James Buchanan and the Public Choice School of Economics.
Romney/Ryan have some serious turnaround work to do. Careful analysis and due diligence brought Romney and Bain Capital notable winners like AMC Entertainment, Burger King, Burlington Coat Factory, Domino’s Pizza, Dunkin’ Donuts and Staples.
Compare that to Obama, whose focus on ideology, political calculation, cronyism, and campaign contributors has produced losers and scandals like Abound Solar, Crescent Dunes, Ener1, Fisker, Mountain Plaza, Solyndra, Tesla, and, most recently, battery-maker A123 Systems. And just think of the all the other “green” projects that would collapse if their taxpayer subsidies were cut off. [Read more →]
October 17, 2012 4 Comments
Elections have consequences, and the upcoming one promises to have dramatic impacts for our energy-driven economic future.
Consider what each major contender has said regarding these key issues, with the incumbent promoting an ”all of the above, but not too much fossil fuel” policy, and the major challenger promoting more of an “all of the best” energy policy.
Oil and Gas
The energy industry begins from the ground. The two candidates’ drilling policies are markedly different.
Obama: Last May, President Obama seemed to be expressing a drilling epiphany when he said: “we should increase safe and responsible oil production here at home.” There was his oil moment in Cushing, Oklahoma. Yet nearly two-thirds of federal lands are currently off-limits to drilling and mining, and leasing has slowed in recent years.
Oil production has been declining on federal lands, while booming on private and state lands. As America continues to dive deeper into debt and export industries and jobs overseas, the lifeblood oil and gas industries essential to fuel recovery are being constricted. Meanwhile, our neighbors, along with Russia and China, are aggressively pursuing offshore development adjacent to our borders.
Mexico is drilling a deepwater well only 22 miles from U.S. waters in the Gulf of Mexico; Cuba plans to drill 60 miles from Key West; the Bahamas are proceeding with leases not much farther away; Canada is actively drilling near the Maine coastline and in the Beaufort Sea just east of Alaska; and Russia is aggressively moving into the Arctic Ocean at Alaska’s western boundary.
At the same time, a massive Chinese-built semi-submersible oil rig has been dispatched from Singapore to a position off northwest Cuba, about 50 miles from Key West. Spanish oil giant Repsol YPF is leading a consortium that will operate the rig at depths more than a mile deeper than the Deepwater Horizon. [Read more →]
October 8, 2012 8 Comments
“When government undertakes tasks for which it is ill equipped it squanders the authority necessary for carrying out its core responsibilities. Pervasive rent-seeking, bad for our economy and worse for our republic, should be discouraged instead of rewarded. If government becomes integral to securing every advantage and assuaging every grievance, then governance becomes impossible.”
- Richard Voegeli, “Reclaiming Democratic Capitalism,” Claremont Review of Books, Spring 2012, p. 46.
Governments around the world are having buyers’ remorse with their bets that solar and wind could effectively diminish oil, gas, coal, and nuclear. So much cost, so little energy. So much cost, so little reliability, and so much need for backup power.
The story is the same for the U.S. Department of Energy. The Obama administration’s rocky road with green-energy boosterism is no secret. With big names like Solyndra and Solar Trust of America, it’s hard to lose sight of the administration’s funding failures.
But what may come as a surprise is the overall amount of money being thrown away on these green companies that the administration has championed. Of the $10.7 billion in green-energy commitments, detailed below, approximately $3.2 billion is to companies that are in bankruptcy, and another $7.1 billion is committed to teetering firms.
The good news is that private developers are postponing (and probably canceling) projects that even with government subsidies are uneconomic. General Electric Co. just last week halted construction of what would have been the largest solar-panel factory in the U.S. Some 335 workers can now find economic employment.
Here’s the breakdown of the “green” energy carnage to date: [Read more →]
July 9, 2012 9 Comments
Articles on this blog have consistently made the point that shale gas in the U.S. represents an unprecedented pathway to abundant, low-cost, clean energy supplies. In previous posts it was noted that unconventional gas resources, combined with new production technologies, could potentially break the global oil-natural gas price bond, just as has happened in the U.S.
Shale gas is now subject to active exploration in England, Australia, Poland, Ukraine, China, India, and to a lesser extent, South America. Canada has already moved to the development stage with its shale formations in British Columbia (Montney and Horn River). Mexico shares the prolific Eagle Ford shale formation with Texas, but its state-owned PEMEX has done little to develop that resource yet.
Other nations have rejected the gift of unconventional gas. Romania and Bulgaria, both heavily dependent on Russian gas, have said “no” to shale gas production, as has France. 
Even with the dropouts and the laggards the International Energy Agency (IEA) sees unconventional gas comprising more than 30% of total world gas output, up from today’s 11%, by 2035:
Source: IEA, “WEO 2012 Golden Rules Report, Table 2.4
However, IEA stresses the need to adhere to its ‘Golden Rules” so as to achieve the golden age of gas. [Read more →]
June 29, 2012 No Comments
Greenwire (Energy & Environmental News) ran a piece (excerpted below) that further portrays Obama faking hydrocarbon affection during a tough election year where jobs are scarce and natural gas is a leading job creator.
The article profiles Heather Zichal, Obama’s deputy assistant for energy and climate change, who has just started the job of building bridges between the Administration and the natural gas industry.
With the Administration’s environmental allies throwing natural gas under the bus, and going all out to stop drilling where natural economics dictates, the industry has learned its lesson about coalescing with the enemy.
OR, let’s hope so. After all, the industry holds the high ground in that
- Energy is the master resource.
- Consumers want oil and gas (and coal), not inferior substitutes such as ethanol, (on-grid) solar, and wind.
- Jobs, jobs, jobs are all about the technological boom in oil and gas drilling. (Artificial) boom and bust is about politically correct energies that wither and die as taxpayer dollars go away.
In the E&E article, “With ‘Midwestern Straightforwardness,’ Heather Zichal Looks to Woo Industry Allies” (May 30, 2012: sub. req.), we have the irony of Ms. Zichal trying to square the circle of real consumer-driven energy vs. politically correct pretend energy.
In Heather Zichal’s new position as President Obama’s deputy assistant for energy and climate change, she must work as a liaison between the administration and the oil and gas industry, making inroads with officials at the same companies that helped derail climate change legislation she was pressing Congress to pass just a few years ago. [Read more →]
June 8, 2012 4 Comments