President Obama’s promise Wednesday to do something about rising gas prices was drowned out by the giant sucking sound of American dollars being funneled into OPEC pockets. Not that many expected his plan to make much difference anyway. A president who, as a candidate, said he didn’t mind high fuel prices is not likely to be the one leading the nation toward energy policy sanity.
Mr. Obama, feeling the heat from a 28 percent spike in the cost of gas at the pump over the past year, announced a formidable goal to slash oil imports. “That is something that we can achieve,” said the president. “We can cut our oil dependence by a third.” He pledged to do this by boosting domestic oil production along with a scheme to use more natural gas in the nation’s public transportation fleet, command greater fuel efficiency in cars and trucks, and provide larger subsidies for production of biofuels.
While the president was making his energy pitch, the Financial Times reported that the Organization of Petroleum Exporting Countries, dominated by nations hostile to the United States, is on track to rake in more than $1 trillion in oil revenues for the first time ever. Pump prices now average in excess of $3.58 with some regions facing rates in excess of $4. Each 1-cent increase at the gas pump makes consumers across the country $1 billion poorer collectively.
After spending the past two years bringing back these higher prices, Mr. Obama has little credibility promoting what he claims to be solutions. Following the Deepwater Horizon oil spill in the Gulf of Mexico last year, the Obama administration imposed a ban on oil drilling in the Gulf and both coasts. He also brought the issuance of new drilling permits to a virtual standstill. Nevertheless, the administration has gone to great lengths lately to convince Americans that the oil production decline is the fault of the oil companies.
In that vein, the Interior Department released a report Tuesday saying that two-thirds of the oil and gas leases in the Gulf are not being used. Posturing as an advocate of increased drilling, the president has proposed in his fiscal 2012 budget plan to impose a fee on leaseholders who aren’t actively producing resources. That may sound impressive, but the rhetoric is designed to mask the reality that gas and oil reserves are found on a tiny fraction of the land leased by the energy companies. They must also untangle miles of federal red tape before they can drill.
As if the O Force assault on the oil and gas industry were not enough, administration diktats also impede power production from the nation’s two most cost-effective energy forms: coal and nuclear. Driving up the price of energy places upward pressure on the price of nearly all consumer goods.
House Republicans have their own plan to introduce legislation forcing the administration to sell more offshore drilling leases and and issue permits within a set time frame. That’s a helpful step, but if Americans expect real energy policy change, they will only have it through regime change in 2012.