Obama’s Energy Follies Continue

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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Gas prices are, of course, evidence of just one of President Obama’s many energy policy failures. There’s the ludicrous diversion of tax dollars to solar energy companies whose business model depends on evading the laws of both economics and thermodynamics. There’s the remarkably short-sighted decision to kill the Keystone XL pipeline. There’s the continuing effort to undermine drilling in the Gulf by throwing up pointless regulatory obstacles. Yet, in spite of all that this president has done to damage the cause of American energy independence, there is one sector of the energy business that even he hasn’t been able to screw up – yet: the natural gas industry.

Make no mistake: were it not for the incredible renaissance of the American natural gas industry, what is currently an economic mess would be a far larger economic disaster. The natural gas industry is creating hundreds of thousands of jobs, developing export markets that will help address our trade imbalance and recovering byproducts that will revitalize our chemical manufacturing sector. Natural gas will also take a big bite out of foreign oil sales. The big natural gas producers are investing billions in infrastructure that will allow semi-trailer tractors to use natural gas fuel, at less than one fifth the price of diesel. Will natural gas-powered automobiles dominate the roads a decade from now? It would not be at all surprising if that were the case.

The growth in natural gas production in the United States is largely due to the industry’s ability to access gas trapped in shale formations. We can now get at that gas because horizontal drilling technology has evolved to the point that it’s economically viable to get at those deep, but relatively “thin” formations in a cost effective manner. Once producers put horizontal pipes into place in a shale formation, they can then get at the gas trapped in the formation using the age-old technique known as hydraulic fracturing, or “fracking”. This technology, which dates back to the late forties, involves injecting a lot of water, along with a bit of sand and a tiny amount of chemicals in order to fracture the shale and release the trapped natural gas.

There is nothing more sinister about drilling for shale gas than there is about any of the other myriad of ways that we drill into the earth for a variety of other reasons. Unless, of course, one happens to be an eco-activist. In that case, there has to be something horrible about shale gas drilling, since it involves fossil fuels and because people are making money while doing it.

With that history as a backdrop, last Friday President Obama signed an Executive Order coordinating federal oversight of domestic natural-gas development. If Obama were a President who both understood and believed in free markets, that would be a good thing. There is much in the way of overlapping state and federal authority when it comes to natural exploration and production. If “coordinating” equated to “streamlining” that would be welcome news indeed. Unfortunately, the history of this administration suggests that every regulatory review of this sort will inevitable result in the creation of more onerous regulatory obstacles in the free market.

More than any other factor, energy availability, energy prices and energy policy drive this nation’s – or any nation’s – economic future. In the past week the President of the most powerful nation on earth has demonstrated that he neither understands nor cares to understand the realities that drive global energy markets. It’s hard to imagine that Obama could contrive of ways to prove that he is even more out of touch with reality, but he has once again manage to exceed America’s lowest expectations.

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  • http://thereisnosantaclaus.blogspot.com TINSC

    When it comes to gasoline prices, nothing would help more than the passage of the Open Fuels Standard Act.

    • joe

      obama frolics unworkable

  • Ken

    Just another example of Obama and his uber-Left/Progressive allies trying to "bring down" America as they say. Everyone knoes that for the economy to thrive, abundant affordable energy sources musy be available. We have all that here in this country if we were allowed to get at it. This administration has erected more rules and regulation barriers to energy exploration and retrieval so as to hinder as much as possible the countries ability to flourish economically. And, all of this is being done under the guise of "environmental justice". I am all for protecting the environment. We have to be vigilant of the world we leave our children and their children. But, our country needs new energy sources and collection and processing methods are the safest to date. This administration knows this, yet deters any attempt to unlock our vast resources. It is a deliberate, calculated agenda with the aim of sundering our country from within.

  • ProgDestroyer

    All the hand wringing from the red greenies about averting disasters associated with oil exploration needs to be debunked every time they open their pie-holes. "Nature" sullies itself with the black gold on a scale much greater than mankind does. One excellent example is off the coast of the soviet state of kalifornia near Santa Barbara where the equivalent of 8-80 Exxon Valdez spills occur over a short period of time. http://www.sciencedaily.com/releases/2009/05/0905

    Keep in mind that the BP spill in the gulf was the result of over pressure and one gets a hint of how much oil is out there waiting for us to get it. But leave it to the anti-growth reds in the whitehouse to thwart that effort.

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  • StephenD

    Ditto Ken and ProgDestroyer!! You two said it all…and very well indeed!

  • John C. Davidson

    The plan of these Socialists is to bring our country to a level of their socialists allies, but may well plunge the world into economic chaos. I heard from somewhere a saying; "Forgive them Lord, for they know not what they do".That has a nice ring to it, but we cannot forgive, we must act!

  • pierce

    Energy follies, hell, the whole thing has been a folly from the very beginning. Hopefully the american electorate will realize this come November 2012. We need to have closure on this President.

  • kongMing

    Supply runs secondary to currency inflation in this case. The inability of Obama to lower his reckless spending led to a money printing scheme where the same debt is paid with inflated dollars of lower value. Other commodities have increased faster than energy.

    Obama if elected will do everything he can to halt natural gas growth. His out of control EPA has already shown its intent to spread myths of poison water and earthquakes. I can only speculate on his motives, which appear to be based on fundraising and pleasing his leftist political backers with absolutely no executive awareness whatsoever.

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    So Obama is going after "oil speculators" and Capitalism. No more evidence is needed to show that he's not interested in solving America's energy problems. All he would have to do is resurrect the Keystone pipeline project; the announcement of THAT would bring gasoline prices down .30 a gallon overnight. He could also easily open more Federal lands to drilling. Gasoline was $2.50 a gallon in this locality, in August 2010; and there's no reason why the price can't return to that level; if only Obama would cooperate.

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