Obama on oil: I DID build that!

Energy_thb

by NW Spotlight

After years of zigging and zagging on energy policy, President Obama has final found a strategy he can embrace: take credit for what other people are doing.

That’s the key takeaway from the State of the Union speech last night where he touted the domestic oil and natural gas boom that is driving down the price of fuel for Americans from Boston to LA. It’s a moment that surely gave his environmental base heartburn, but he knows smart politics when he sees it.

Unfortunately for him, he can’t lay claim to any of his own policies that are driving this energy boom. The exploration and production of domestic oil and gas is taking place almost entirely on private land, not through leases on public lands or offshore reserves. The success, however, is undeniable.

The oil and gas sector invested more back into the economy than any other sector of the economy – a whopping $40 billion – according to the liberal Progressive Policy Institute. The industry supports 10 million American jobs.

Obama’s previous strategy for penalizing this kind of success and job expansion is to target the industry for tax increases, as he did explicitly in last year’s State of the Union. His political braintrust may have learned that it’s not a good idea to cook this golden goose at the same time you’re taking credit for lower gas prices. But, watch that his reality matches his rhetoric. That proposed tax increase is coming as part of his budget, and it’ll take money directly out of the economy and the pockets of Americans. That’s how tax increases work.

Energy independence is something that all politicians say they want. But, Obama is coming to the political realization that in order to really achieve that goal, the American oil and gas sector (yes, fossil fuels) must be free to explore and produce energy. Despite being heavily subsidized, renewable energy will only account for 9% of U.S. energy consumption, according to the U.S. Energy Information Administration.

Obama took credit for the $750 average savings from lower gas prices American households are poised to enjoy this year. Unfortunately, Obama will be delivering a proposed tax increase to oil and gas companies when a simple “thank you” would be most appropriate.

Post to Twitter Post to Facebook Post to LinkedIn Post to Reddit

Posted by at 08:59 | Posted in Economy, Energy, President Obama | 4 Comments |Email This Post Email This Post |Print This Post Print This Post
  • wfecht

    not only is it part of his budget but GOV Kitz as well. electricity is all ready climing at an annual rate higher than inflation (3% residentialkk and 2.6% comercial and industrial.) http://apps.puc.state.or.us/orders/2014ords/14-422.pdf watch it continue. this is after an increase the previous year. what is driving the increase? removal of current production (Boardman power plant which meets current an future air quality standards set by the EPA) and replacing it th wind power which inspite of all the federal subsidies is still more expensive. and not environmentally friendly. They had to go get permission to kill birds of prey in order to provide wind energy not to mention all the song birds federally protected and not protected killed every year by wind turbines.
    so watch your pocket book. enjoy the “free and clean” energy.

  • Bob Clark

    Obama is Obummer – that’s about all I can say. Interestingly, an oil man with the last name of Papos (I am probably not spelling it correctly), who chaired EOG Resources (formerly part of Enron/Houston Pipleine company or something like that), is credited with the American revolution in oil and natural gas drilling. He started tinkering with drilling technology back in the 80s when oil prices collapsed along with natural gas prices. (Hardly a time to be experimenting with higher cost technologies.) But over the course of the ensuing 20 years it bore enormous fruit, unleashing oil and natural gas trapped in what used to be hard to extract geological formations.

    Ironically, the U.S leads much of the globe of late at reducing its carbon dioxide emissions (as of a year or two ago); and in large part, it is because of this oil and natural gas drilling technology venture now bearing fruit. It drives down the cost of natural gas so much, it makes natural gas power generation more cost effective than the cheapest form of generation – that of coal generation. General Electric and other power generating turbine makers accentuate the gains in emission reductions by increasing the efficiency at which natural gas is converted to electricity. Coal and natural gas generation used to burn 10,000 Btus to make 1 KWH of electricity. But the new GE turbines allow natural gas to be burned at a rate of 7,000 (and going lower) Btus per 1 KWH of electricity. Coal physically contains more carbon dioxide per BTU in conversion than natural gas, too, so I am told (perhaps as much as 50% more).

    This private entrepreneurial revolution in the oil and natural gas patch swamps anything we are getting in the heavily government subsidized renewable energy fields w.r.t. to carbon dioxide emissions.
    What’s most telling is this new horizontal and fracking drilling technologies are still being improved so as to reduce their negative local environmental effects. It is yet to go much beyond the U.S borders, too.

    I think it is very possible we might have seen the ultimate peak in oil prices themselves. This new technology going global will help keep a cap on oil prices, possibly a long term equilibrium price in the $70 to $80 per barrel range. Then, too, renewable energy and efficiency in fuel use are also advancing; and at some point demand for fossil fuels for things other than road asphalt and plastics will flatten globally (e.g, demand for oil has slowed substantially in the developed world already, and it is China and others like, who propelled much of the last decade surge in oil demand).

    Population growth is also steadily slowing, with the developed countries actually looking at population decline. The latter adds to my speculation the golden era of petroleum oil may have just blinked and begun a fade.

  • Jack Lord God

    I doubt even the frothing mouthed give Obama credit for falling prices at the pump. For most families, falling gas prices have been the single best piece of economic news, perhaps the only one for some, and Obama had absolutely zero to do with it. That’s pretty powerful since a large number of people are well aware he spent a trillion on a stimulus that didn’t help them, likely think we are still in a recession, and are well aware their wages have fallen over the years. this late in the game, him taking credit for falling gas prices is simply another bad punch line. Kind of like spend a trillion to yuck it up with billionaire Oprah about “guess I found out there weren’t any shovel ready jobs”. Two years left of what will likely not be remembered as the best of times by many.

  • guest

    He deed it! ZorBama the Explora squeezed his sponge pants and the outpouring flowed into town squares with a melodious do wop a re bop, gotta love me and my transponder horsey maneuvers. Not!

Stay Tuned...

Stay up to date with the latest political news and commentary from Oregon Catalyst through daily email updates:

Prefer another subscription option? Subscribe to our RSS Feed, become a fan on Facebook, or follow us on Twitter.

Twitter Facebook

No Thanks (close this box)