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TRIPLETT: Obama’s war on American energy
China’s Canadian acquisition would harm U.S. interests
Question of the Day
On Jan. 20, 2009, the day Sen. Barack Obama took the oath of office as the 44th president of the United States, the average price of regular gasoline was about $1.85 per gallon. Now it is 100 percent higher, having set a new record for the Labor Day holiday weekend. The initial winner is President Obama, whose energy secretary has declared the intention of team Obama to drive up U.S. gasoline prices to “European levels,” at least $8 per gallon. Losers include commuters and any business that depends on deliveries for its goods or services and, increasingly, seniors who have to make the painful choice between driving to the doctor’s office and driving to church on Sunday morning.
Mr. Obama’s war on coal is so notorious that many Democratic politicians from coal country boycotted the Democratic National Convention. The biggest loser is Cecil E. Roberts, president of the United Mine Workers of America (UMW), who sold his members on Mr. Obama in 2008 only to be betrayed. Tellingly, this year, the union is not endorsing Mr. Obama’s re-election.
Hydropower was the great accomplishment of President Franklin D. Roosevelt — creating the Hoover Dam and the Tennessee Valley Authority — which brought cheap electricity to tens of millions of Americans living in rural areas. Mr. Obama’s Deputy Assistant Secretary of the Interior Deanna Archuleta told a Democratic activist group earlier this year that there would never be another federal dam built in the United States.
American oil and gas producers, for good reason, think Mr. Obama will do to them in his second term what he did to health care in his first. They didn’t need Obama Environmental Protection Agency appointee Al Armendariz, since resigned, to be caught telling an environmentalist group that he intended to “crucify the oil and gas companies.” Mr. Obama already had signaled through liberal media outlets his intention to move cap-and-trade to the front burner in his second term.
Earlier this year, Senate Republicans Jeff Sessions of Alabama, David Vitter of Oklahoma and John Cornyn of Texas reminded the administration that oil production on federal lands (controlled by the Obama administration) had declined by 275,000 barrels a day while oil production on private and state lands (which they don’t control directly) had increased. In fact, without the huge increases in output from the Eagle Ford shale formation in Texas and the Bakken formation in North Dakota, prices at the pump for American consumers would have been much higher. Eagle Ford alone produced more than 30 million barrels of oil in 2011 (up from 4.4 million in 2010). Even the most conservative estimates for the Eagle Ford and Bakken formations approach a trillion barrels of recoverable oil at today’s level of technology. Normally, if supply goes up, price goes down. It’s easy to see that the Obama administration will have to reduce the supply of American oil if it is to reach its goal of increasing the price of gasoline to $8 per gallon.
If American consumers and businesses are the losers in the Obama administration’s war on American energy, who are the winners?
Almost unnoticed in his acceptance speech, Mitt Romney said, “[Mr. Obama’s] assault on coal and gas and oil will send energy and manufacturing jobs to China.”
Is he right? Are the Chinese the likely winners here?
Perhaps Mr. Romney had noticed this statement last May by China National Offshore Oil Co. (CNOOC) Chairman Wang Yilin : “Large-scale deep-water rigs are our mobile national territory and a strategic weapon.” The idea that wherever there is a CNOOC rig, there is a Chinese territorial claim and a strategic weapon certainly raises the temperature in the South China Sea, where China and its neighbors already have overlapping claims. But what about the Indian Ocean, where there is a lot of oil off the Myanmar coast and Beijing has close relations with the Myanmar military junta? Should New Delhi be worried?
Until recently, CNOOC has operated in shallow waters, but the company recently announced its intention to purchase the Canadian energy company Nexen for $15 billion. Nexen, perhaps not by coincidence, is a player in deep-water drilling in the Gulf of Mexico. Acquire Nexen, acquire deep-water drilling technology.
“Mobile [Chinese] territory and a strategic weapon” in the Gulf of Mexico? At first glance, that seems to be way too big a leap of logic. Could Mr. Wang be just a businessman shooting off his mouth to create enthusiasm among his employees? But CNOOC is owned by the Chinese government, Mr. Wang is a de-facto Chinese government official, and his statement has never been disowned by Beijing.
Mr. Romney is right: The Chinese Communist Party is the obvious winner of President Obama’s war on American energy.
William C. Triplett II is former chief Republican counsel to the Senate Foreign Relations Committee and coauthor of “Bowing to Beijing” (Regnery, 2011).
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