A Free-Market Energy Blog

Obama Gives Oil and Gas a Cold Shoulder (Ducking Houston on his recent visit)

By Robert Bradley Jr. -- August 18, 2010

President Obama did not include Houston on his visit to Texas last week rallying his base and raising funds for Democrats for the November elections. The President was originally expected to be here but ended up in Austin and Dallas. Was this bypass a duck-out? After all, Congressman Kevin Brady (R. Tx.) pointedly invited the president to meet face-to-face with Houston energy workers on the other Gulf Crisis—the federal offshore drilling moratorium that threatens tens of thousands of jobs here and in much of the Gulf Coast region.

Sure, Obama’s Texas visit was not about helping Republican candidates or hosting a Tea Party event. But why couldn’t the president reserve an hour to talk to workers whose livelihoods depend on Houston’s largest industry – an industry that is being victimized by the President’s everyone-is-guilty drilling policy? “I have seen enough to know that people are hurting,” said Michael Bromwich, Obama’s hand-picked moratorium advisor, recently. Surely the president needs to talk to the oil and gas workers in order to share that understanding—and to know that time is of the essence when it comes to lifting the moratorium.

Obama’s cold shouldering of the industry is no accident. It is an open secret that the White House intelligentsia (called by some the “‘green’ dream team”) does not like oil or even natural gas. They like solar, wind, and other esoteric energies that just happen to be more expensive and less reliable—and, on close inspection, environmentally suspect.

For a president interested in job creation, and at least nominally in favor of energy affordability, Obama is proving to be his own worst enemy and at odds with the average American. The polls reflect public concern with the explosive growth in government being driven by the party in power. From health care to energy, most Americans believe the country is headed in the wrong direction.

The American Petroleum Institute estimates that more than 9.2 million jobs are tied to the domestic oil and gas industry. By contrast, the American Wind Energy Association claims 75,000 domestic jobs depend on its energy source. But the hundred-to-one disparity does not paint the real picture. Unlike the hydrocarbon jobs, virtually all wind energy employment is government dependent. Forced taxpayer and ratepayer subsidies have created an artificial industry that must feed at the public trough to survive.

Nowhere is the wind-industry mirage more evident than in Texas, the nation’s leading state for wind production. Texas’s lead is not due to voluntary consumer demand for a product based on superior economics and reliability. It is due to an iron-clad government mandate. Back in 1999, Enron Wind Corporation lobbyists pulled a coup by getting a renewables mandate inserted into the state’s electric restructuring bill. That mandate was increased again by the state legislature. Think wind, think Enron.

In its heyday, Enron was considered a “green” energy company, because of its solar and wind investments and its active support of climate alarmism. In his book The Carbon War, ex-Greenpeace official Jeremy Leggett wrote that Enron was “the company most responsible for sparking off the greenhouse civil war in the hydrocarbon business.” Left environmentalists praised Ken Lay and his company for their progressivism.

And environmentalists cheered a second company: BP, the oil major that tried to rebrand itself as “beyond petroleum” with “green” energy investments and a message of climate alarmism.

Ironically, Enron and BP in their different ways turned out to be a real energy problem, not the solution. Other oil companies, from the smallest independents to the largest integrated majors, have safety and environmental compliance records eclipsing those of companies that practiced, in the parlance of environmentalists, greenwashing. If there is a lesson from BP and Enron, it is beware to altruistic companies that profess to be holier than thou. “I have never known much good done by those who affected to trade for the publick good,” Adam Smith wrote in 1776. “It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.”

Can Obama at this late date reconsider his energy worldview? When the crucial factor of energy density is taken into account, so-called “green” energy fails to live up to its hype. Explained Peter Huber in Hard Green: Saving the Environment from the Environmentalists: “The greenest fuels are the ones that contain the most energy per pound of material than must be mined, trucked, pumped, piped, and burnt.” In contrast, “extracting comparable amounts of energy from the surface would entail truly monstrous environmental disruption.” Huber concludes: “The greenest possible strategy is to mine and to bury, to fly and to tunnel, to search high and low, where the life mostly isn’t, and so to leave the edge, the space in the middle, living and green.”

So back to Obama’s visit to Houston, the oil and gas capital of the United States. Can we have the audacity to hope that the President will use the occasion to announce the immediate lifting of the moratorium? He should. The offshore oil and gas industry has proven to be safe and environmentally conscious except for the corner-cutting of one operator that grievously tried to get “beyond petroleum.” The lessons for corporate governance, corporate responsibility, and public policy are clear: real environmentalism must substitute for image environmentalism.


  1. Dave  

    On Monday 8/16, Texas broke the previous record for electricity demand, according to ERCOT, the Electric Reliability council of Texas.
    From ERCOT: “Wind output averaged approximately 680 MW during the peak hour – or 1 percent of the total load. ERCOT currently has 9,317 MW of installed wind capacity”

    630/9317 is about 7% of “capacity” …. illustrating yet again why wind power is scandalously expensive and ineffective contibutor to the state’s electricity generation needs.


  2. Jon Boone  

    Yes, Dave. What Texas electricity consumers experienced with its installed wind at peak demand on August 16 was typical, perhaps on the high side, of wind performance elsewhere at the highest peak demand times–in California, the Pacific Northwest, Spain, Britain, Germany, and Denmark. But this isn’t the real failure.

    The real failure occurs when wind reaches its peak performance, in Texas, say, when it produces 7500MW at times of least demand, bouncing around unpredictably and requiring the grid to work so much harder simply to stand still, in the process consuming as much or more fossil fuel than if there were no wind at all. At increased costs to consumers.

    Wind performs best when it produces nothing. There’s a reason that the various RPS requirements for wind demand no performance at all, only “deployment.”


  3. Kent Hawkins  

    Jon Boone has done an admirable job of concisely summarizing the basics of this issue. I do have to add that his description of activity at least demand also holds for all levels of demand when the wind is blowing.


  4. Rod Adams  

    Jon – excellent points. As you clearly stated, oil and gas direct employment is far higher than the green energy jobs that are often touted. In addition, it would be difficult to find an American worker whose employment is not directly supported by reliable, dense forms of energy like oil, coal, electricity and natural gas.

    One additional thought – when it comes to energy density, oil is the kind of chemical fuels, however, a handful of uranium contains more energy than 30 tanker trucks full of oil.

    Rod Adams
    Publisher, Atomic Insights

    (Computation – uranium contains 2 million times as much energy per unit mass as oil. The size of a pound of uranium can be represented by three shooter marbles. An over the road truck can normally carry about 66,000 pounds, so you need about 30 of them to carry 2 million pounds of oil.)


  5. Rod Adams  

    Oops – poor proofreading. I meant to write “oil is the king of chemical fuels” not “oil is the kind of chemical fuels.”



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