By Steve Everley on January 3, 2011 2:12 PM
With gasoline currently above $3 per gallon nationwide and economists expecting that price to rise even further in 2011, America should be getting serious about producing more of its own resources. But instead of focusing on how to bring more relief to American motorists, President Obama has imposed massive new regulations, restrictions, and even threatened higher taxes on American energy, all of which negatively impact domestic production.
What follows is a list of the five most egregious actions on the part of the Obama administration that have contributed to higher gasoline prices and greater dependence on foreign dictators for our energy:
Cancelling existing permits: Immediately after taking office in 2009, President Obama’s handpicked Secretary of the Department of Interior, Ken Salazar, canceled 77 leases for oil and gas drilling in Utah. The fact that this was one of the administration’s first regulatory decisions meant that American energy companies were immediately concerned about their ability to produce oil and gas in the future, injecting a level of uncertainty into the market that moves the country away from job creation and economic recovery. One year later, the administration canceled 61 more leases, this time in Montana, as part of President Obama’s war on global warming.
Needlessly delaying offshore leasing: Not long after Ken Salazar canceled the Utah leases, he decided to extend for another six months the public comment period for new offshore drilling. As allowed by law, the public had already been given 45 days to comment on the federal government’s pending lease sale to offshore energy producers, after which time the administration would begin developing plans for new leasing. But the Obama administration was so opposed to oil and gas drilling that it wanted to drag the process out further, which meant offshore producers would have to wait even longer before they could start drilling. This was in addition to the 25 years that no drilling was allowed for most of the Outer Continental Shelf due to a congressional moratorium that ended in 2008. Adding insult to injury is that the additional public comments for which the White House asked actually supported expanding offshore drilling by a two-to-one margin, a fact that the administration deliberately kept hidden from the American people. Put simply, the Obama administration did not want any additional offshore drilling, and the fact that the public overwhelmingly opposed them wasn’t going to stop them from pursuing their ideological goal.
Pushing for more taxes on American energy: When the Pelosi-led House of Representatives passed its massive cap and trade energy tax, the Obama administration celebrated. After all, it was then-candidate Barack Obama who happily declared that under his plan of cap and trade, energy prices would “necessarily skyrocket.” Although his target was primarily the coal industry (which suffered badly in 2010 under President Obama’s watch), imposing a tax on carbon dioxide would also heavily impact oil and natural gas production. In fact, there was a new gasoline tax in the most recent cap and trade bill in the Senate, legislation President Obama helped negotiate and would have happily signed had both chambers of Congress passed it. A study from Harvard University found that a carbon cap that was less stringent than what Congress was considering could send gasoline prices soaring to $7 per gallon. When all efforts to pass cap and trade legislatively failed miserably, Obama ignored the message — that Americans strongly oppose new energy taxes — and moved instead to impose a carbon cap administratively through the EPA. Such regulation targets all sectors of the economy, including transportation and oil production and refining, which ultimately means higher gasoline prices at the pump.
Imposing a moratorium on oil and gas drilling: Immediately after the Gulf oil spill began in April 2010, the White House began soliciting input from drilling experts in the National Academy of Engineering as to what the proper response should be. The Obama administration then imposed a six-month moratorium on offshore drilling, claiming that the experts they consulted had advised them to take such an action. Except they hadn’t. The experts stated publicly that they never supported such a moratorium, and that the White House had manipulated their opinions and expertise solely to advance a political agenda. Because the administration had no basis for its ban, two federal courts stated on three separate occasions that the moratorium was unjust. The Obama administration ignored the experts and the courts and kept the ban in place; Salazar said that lifting the moratorium would make him “uncomfortable.” Such a decision ultimately led drillers to relocate their rigs (and hundreds or even thousands of good paying jobs) to other parts of the world, and the long-term impact on domestic production will no doubt be devastating for consumers.
Issuing a new offshore drilling ban: Within weeks of announcing that the moratorium had come to an end, the White House announced a new executive ban on offshore drilling, a ban that is almost identical to what was in place until 2008 when gasoline prices began their climb past $4 per gallon. Amid mounting grassroots opposition to that ban — led by American Solutions’ 1.5 million-member “Drill Here, Drill Now, Pay Less” effort — then-President Bush lifted the executive ban in July 2008, and Congress ended its own quarter-century long legislative ban a few months later, after which gasoline prices plummeted. But President Obama completely ignored that lesson (and the pain consumers felt) and has set the stage for a repeat of the 2008 gasoline crisis by trying his hand at imposing his own ban. Meanwhile, in the few areas where the White House approves drilling, the administration has completely halted new permitting, a de facto moratorium in and of itself. All told, the Energy Information Administration projects that offshore oil production will decline in 2011 by about 220,000 barrels per day (before the Obama administration’s bans, the EIA had actually predicted an increase in production for 2011.)
Why has President Obama led the charge to restrict American energy? The answer is elusive, and it’s anyone’s guess what his administration will do (if anything) to fight for lower gasoline prices. But if past statements from him and his administration are any indication, the U.S. could be stuck (absent major legislative and regulatory changes) with prohibitively high gasoline prices: Then-Senator Obama said on the campaign trail in 2008 that he doesn’t object to high oil prices as long as they come about gradually, and Secretary of Energy Steven Chu once famously said he hoped the U.S. would “boost the price of gasoline to the levels in Europe,” where prices are currently about $7 per gallon.
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