An Energy Policy Designed to Fail

Rich Trzupek is a veteran environmental consultant and senior advisor to the Heartland Institute. He is the author of the new book Regulators Gone Wild: How the EPA is Ruining American Industry (Encounter Books).


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Gasoline prices are on the rise again, mostly due to a combination of turmoil in the Middle East and increased worldwide demand that has driven crude prices up over $100 per barrel. When refiners switch to EPA-required summer blends starting on May 1, gasoline prices will increase even more. The left understands that the harder consumers are hit at the pump, the more sympathetic they are to calls for more domestic oil exploration. In an attempt to head off the issue, Interior Secretary Ken Salazar and Senate Majority Leader Harry Reid and other leftists have fallen back on a tired, discredited canard: the “use it or lose it” approach.

The theory – one that President Obama himself embraced during the 2008 campaign – is that energy companies are “sitting on” leases covering millions of acres of public and Native American lands. Why should the Interior Department issue new leases for oil and gas exploration when the industry isn’t using the resources it already has?

“In fact, it is those same Big Oil companies that are quite literally sitting on the oil that Republicans demand,” Reid said on Tuesday. “Big Oil is sitting on more than 60 million acres of federal land and water. That means nearly 20 percent of our nation’s oil refinery capacity sits idle. They have shown much more interest in making profits than in making oil.”

“The issue we are confronting is not a failure of the government to lease lands or authorize drilling, it’s that millions of acres under lease exist but the industry is not developing them,” Senator Bob Menendez (D-NJ) said yesterday. Menendez, along with Senators Chuck Schumer (D-NY) and Bill Nelson (D-FL) introduced a bill that would force lease holders to drill or forfeit their leases.

Like so many other simplistic leftist ideas, the benefits of this sort of government-mandated approach to oil exploration quickly falls apart as one peels away the layers of the argument. The basic concept starts with an obvious contradiction, for it presupposes that “Big Oil” is so greedy that it will recklessly and knowingly drive up the cost of the product it sells, but is at the same time too stupid to take advantage of those market conditions by producing more of it. In the view of Reid, Salazar and Menendez, the law of supply and demand is somehow suspended when it comes to oil production.

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  • http://www.hotexchangerates.com/ exchangerates

    A "terrible waste of money" is hugely subjective, everybody has their own opinion on what something is worth (product or service). Also, you only mention one advantage of front loaders (energy/water savings), not exactly a fair argument.

  • spinoneone

    Reid is just spewing more nonsense. Both Chu and 0 have said repeatedly that they want the cost of all carbon based fuels to be, "higher, much higher." Reason one is to make it easier to ram "renewable" energy sources down the throats of a very skeptical public. Reason two is to make that selfsame public more dependent on the government.

    0 and company are refusing to grant or renew drilling permits for the Gulf of Mexico. ANWAR? Not on your life…and it may come to that. So take Reid and the administration's posturing for what it is, a load of political drivel.

    • truthin

      I love the silliness of this post: 'to ram renewable's down the throats'… As if Big Oil hasn't been ramming their product up your a** for the last 100 years.

  • geez

    For starters, get the Muslim Brotherhood out of the White House in 2012.

    • truthin

      OK, so we know from this post that 'geez' is an idiot.

  • Steve Chavez

    A Santa Fe New Mexican newspaper editorial wants prices to go even higher and Congress should impose a $1 increase in the gas tax to bring in monies to help the debt! This newspaper, which would make the CPUSA'S, People's World Weekly, PROUD as they always follow their Party line including a daily bombarding of extreme Leftist Letters to the Editor. Their reasoning is that the public must be forced into mass transit. Bill Richardson, our former Governor, built a train that only travels under a hundred miles length and the cost overruns to build it were $400 MILLION over budget. It loses money every route as the tickets are kept around $5 while the actual costs are $75 according to former Gov. Gary Johnson who is eying a run for President. LIBERALS DON'T CARE even when there is no LOGICAL alternative on the horizon! Electric cars are a fraud so far and the Prius still uses the gas that they hate! I always wonder how they get to the protests against oil and gas!

  • Wesley69

    This article, by Mr. Trzupek, makes some EXCELLENT points. The Community Organizer-in-Chief LIED about energy and oil during his news (propaganda) conference. Obama and his minions continue to feed us the same WORN OUT EXCUSES, that the oil companies are sitting on enough leases to produce more oil; that it will take 10 years to bring these reserves on line or any others, such as off the coast of Alaska or in the Gulf. If we never get starting drilling, naturally, it will take time to bring these supplies on line, but one must maneuver through the minefield of bureaucratic red tape.. But, that's just it, WE NEED TO START.

    HOW LONG MR. COMMUNITY ORGANIZER ARE YOU GOING TO PEDDLE THESE WORN OUT EXCUSES. WHY IS YOUR ADMINISTRATION MAKING IT MORE DIFFICULT WITH ADDITIONAL REGUALTIONS TO TAP INTO ONSHORE AND OFFSHORE OIL? IF NOT OIL, WE HAVE MORE NATURAL GAS, SHALE OIL, COAL. WHY CAN’T THESE BE USED?

    HOW LONG MR. ORGANIZER WILL IT TAKE TO GET YOUR MASS TRANSIT BULLET TRAINS ON LINE? HOW LONG WILL IT TAKE TO GET YOUR GREEN ENERGY PROJECTS – WIND & SOLAR ON LINE? HOW LONG WILL IT TAKE TO GET OUR AUTOMOBILES TOTALLY CONVERTED TO ELECTRIC?

    HOW LONG WILL IT TAKE, MR. ORGANIZER, TO ACHIEVE ANY MEANINGFUL REDUCTIONS IN GREENHOUSE GASES AS YOUR EPA IS DETERMINED TO GET, PARTICULARLY IF INDIA & CHINA ARE DOING LITTLE TO REDUCE THEIRS? BUT, MR. ORGANIZER, TO ACHIEVE THIS YOU WILL BE WILLING TO WRECK THE ECONOMY?

    AND LASTLY, MR. ALL-KNOWING ORGANIZER, WHILE YOU SHUT DOWN ALL DRILLING IN THE GULF, YOU SIGNED A BILL TO GIVE BRAZIL $2 BILLION TO DRILL IN WATERS DEEPER THAN WHAT YOU & YOUR STOOGE SALAZAR BANNED? WHY? IF THE OIL SPILL IN THE GULF WAS SUCH AN ENVIRONMENTAL DISASTER, WHY TAKE A CHANCE IN THE WATERS OFF BRAZIL???

    We, Americans, need to start asking why the Organizer-in-Chief is pursuing these destructive policies? This administration talks a good game. As with other things, that is all is does. As Nero fiddled Rome burned. I will leave it to you to complete the analogy.

    • truthin

      You act like oil produced here would be 'our oil'. Even Rich's biased contact in the energy industry can tell you that's a fallacy.

  • Amused

    Truth is , the gas you are paying 3.79 a gallon for today at the pumps , comes from gas already purchased at $85 a barrel , so you’re getting screwed by the oil companies . And the reason gas is $105+ a barrel , is due DIRECTLY to Wall Street hedge funds and the whole plethora of financial games being played , AND HAS NOTHING TO DO WITH SUPPLY . When are you dimbulbs going to wake up ? I sicerely hope the price at the pump hits $8 a vgallon , and it’s so npainfull , maybe some of you “uber-patriots ” will actually put a leash on the oil companies and the wall street brokers . Capitalism ? My Arse ! It’s THIEVERY !

  • Amused

    Truth is , the gas you're paying$ 3.79 or so a gallon for , has already been purchased by the oil companies for $85 a barrel – you're getting screwed . The high prices have everything to do with this , and Wall street Hedge Funds , Speculators and Traders , but NOTHING to do with supply . Smarten up , the oil companies are pulling your chain

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    Since 2006, Quebec has a green plan in order to achieve the objective of the Kyoto protocol on climate change.The Ministère du Développement durable, de l'Environnement et des Parcs du Québec (Ministry of Sustainable Development, Environment and Parks) is primarily responsible for implementing environmental policy. For its part, the Société des établissements de plein air du Québec (SEPAQ) is the lead agency for the management of national parks and wildlife reserves.

  • truthin

    Offlimits to the Gulf of Mexico? Seems you didn't hear that Cheney's Haliburton already destroyed the gulf. Sorry you didn't get that memo.