The Democratic Party has traditionally supported approaches to reduce American reliance on foreign oil favoring more expensive, less reliable, but “cleaner” energy solutions like wind and solar energy. Yet, in many cases, it has resisted increasing domestic extraction of oil and gas resources.
However, President Obama outlined a surprising new energy policy yesterday that appears on the surface to reverse this approach. At first glance, the policy rightly supports expanding domestic oil and gas development and production. Unsurprisingly, it also advocates traditional liberal boondoggles like high-speed rail. Given that the policy appears to adopt initiatives that conservatives have been advocating for years, the President can claim its alleged bipartisanship and that he is really sticking it to the sheiks in the Middle East.
The President claimed his new policy supports “finding and producing more oil at home” and “encouraging offshore oil exploration and production.” He further suggested his administration is “working to expedite new drilling permits for companies” and “exploring and assessing new frontiers for oil and gas development from Alaska to Mid- and South Atlantic states.” The President even asserted that clean coal and nuclear power would also be part of his solution.
Unfortunately, many of these claims appear disingenuous and aimed more at the President’s reelection prospects than any actual change in policy. As usual, the devil is in the details.
One sign of this is how the administration claims credit for oil production increase in America’s Outer Continental Shelf from 446 million barrels in 2008 to more than 600 million barrels in 2010. Of course, these claims have little to do with the Obama administration actions, since demand for oil was unusually low in 2008, because of the recession. In fact, the chart below shows that oil production in these areas dropped to near 1996 levels. In effect, the Obama administration is claiming credit for a rebound in oil production that started from a twelve-year low in a recession year and that ended only slightly above 2003 levels. Therefore, it is spurious to claim these increases had anything to do with the Obama administration’s actions.
Given this whitewashing of the historical record, there are several other clues that the President’s claims are disingenuous. Especially once one reviews his more detailed policy proposal. In nearly every place where the President seems to adopt more traditionally conservative energy policies, there is an almost exclusive focus on reviewing and existing existing regulations. While the President pays lip service to more drilling in Alaska, his more detailed policy provides only for a “high-level, cross-agency team to access opportunities to coordinate and facilitate a more efficient offshore permitting process in Alaska, while ensuring that safety, health, and environmental standards are fully met.”
This Orwellian doublespeak seems to promote rule by committee and provides the administration with the ammunition it needs to stall future development, since it mandates that future permitting processes fully meet “safety, health, and environmental standards.” These standards can be anything the administration wants them to be. Therefore, do not expect drilling any time soon.
On Mid- and South Atlantic offshore development, the approach is, again, very bureaucratic. Rather than providing a timeline for awarding drilling permits, the administration focuses on “conducting environmental analysis on potential seismic testing in the Mid and South Atlantic planning areas, which would help determine the scope of potential recoverable resources in the region.”
What the heck does that mean?
The President’s public encouragement of increased domestic natural gas production translates into a laser-focus on examining the possible negative impacts associated with hydraulic fracturing (“fracking”), a process for natural gas extraction. While public safety is important, the President’s policy focuses almost exclusively on this aspect of natural gas extraction at the expense of providing incentives to spur domestic natural gas production.
While the President’s speech had a superficial bipartisan veneer, it was all smoke and mirrors.