At the very same time that the shale revolution is saving the economy hundreds of millions of dollars per day, directly creating tens of thousands of jobs, decreasing the need for foreign oil, and spurring growth in manufacturing that will lead to billions of dollars of new investment and still more jobs, the president is bashing the oil-and-gas sector. Not only that, but in Obama’s new budget, he continues to insist that “clean energy” will drive America’s future competitiveness.
Obama is ignoring the essentiality of domestic oil and gas production, and he’s doing so at a time when gasoline prices are spiking because of the specter of a military strike against Iran — some analysts are predicting a national average gasoline price of $4 or more by April. And while his budget extols the benefits of “energy independence,” Obama wants to eliminate a relatively minor set of tax preferences for the oil-and-gas sector that are helping the U.S. attain record production levels.
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To be clear, all energy sources should be forced to compete, fair field, no favor. Let’s eliminate all energy subsidies. But contrary to the president’s narrative, if that were to occur, it’s the wind and solar industries, not the oil-and-gas sector, that would immediately go into cardiac arrest.
The nut of Obama’s energy policy can be found in a single paragraph of his budget:
As we continue to pursue clean energy technologies that will support future economic growth, we should not devote scarce resources to subsidizing the use of fossil fuels produced by some of the largest, most profitable companies in the world. That is why the Budget eliminates inefficient fossil fuel subsidies that impede investment in clean energy sources and undermine efforts to address the threat of climate change.
To begin, consider the “largest, most profitable” line, which betrays the Obama administration’s antipathy toward the hydrocarbon sector. Apple, the company nearly everyone loves — iPads, iPhones, the secular saint Steve Jobs — has a market capitalization of $475 billion and a profit margin of 25.8 percent. Meanwhile, BP, the biggest producer of domestic oil and the company nearly everyone loves to hate — oil spills, British people, Tony Hayward — has a market capitalization of $147 billion and a profit margin of just 6.8 percent. Apple is three times as large and nearly four times as profitable as BP.
Apple has virtually no manufacturing jobs in the U.S. Instead, it imports nearly everything from China. Meanwhile, last year, the domestic oil industry exported — yes, exported — about 1 billion barrels of crude oil and refined products worth some $100 billion. Those exports are creating jobs and helping America’s balance of trade.
As for the claim that fossil-fuel subsidies are what “impede investment in clean energy sources,” the hard reality is that over the past few years, the oil-and-gas sector has out-innovated the solar and wind sectors. For instance, in 2006, the average domestic natural-gas well had initial production rates of 400,000 cubic feet per day. Today, the average well drilled in the Barnett Shale in Texas has initial production rates of 1.4 million cubic feet per day.
No similar improvement has been seen in the “clean energy” sectors, and thus the tsunami of low-cost natural gas has made wind and solar even less attractive. Travis Miller, a utility analyst at Morningstar Inc., recently told Bloomberg News that “wind on its own without incentives is far from economic unless gas is north of $6.50.” The latest spot price for gas: about $2.50.
Factual economic superiority to "clean" - check
Factual technological growth and superiority to "clean" - check
Factual comparison to a truly large and profitable company - check
Factual comparison of subsidies and results - check
If only a republican candidate were capable of understanding these facts and could articulate them. Huge traction in demonstrating the long-term ignorance and arrogance of the incumbent's approach - to everything. But never mind, not important.
In the long run fossil fuels are unsustainable, but in the long run we'll all be dead.
Perhaps that's short-sighted, but there are presently no viable alternatives to fossil fuels for either transportation or heating homes and businesses. And when it comes to electricity generation, coal and nuclear are the only viable technologies for base-load generation.
In the end it's impossible to know whether the Obama administration is malicious (willing to kneecap the economy to get a few votes) or just incompetent (not realizing that "green" energy is not ready for deployment). And perhaps it doesn't matter, as the end result is the same as high energy prices handicap economic growth.
Perhaps the hardest thing to understand is, why would anyone deploy a technology when the cost of doing so has a negative net present value? For example, when wind or solar farms are built and regulators permit the costs associated with them to be included in the price of electricity, electricity prices rise. Which is to say, the return on investment is negative.
Perhaps research subsidies could be justified. But why would anyone inisst on deploying something that is literally worth less than zero?
If you are suggesting that fossil fuels are unsustainable because there is a finite amount, I would suggest reading up on the latest discoveries... bugs actually create natural gas and petroleum products using decaying plant material. We really need to get away from the term "fossil fuel" since these fuels are - quite literally - renewable.
yes. if it comes down to a choice between energy and fouling the atmosphere we should definitely foul the atmosphere. It is impossible to be pro-energy and also pro-environment.
So tell me, what are the environmental impacts of the use of wide scale wind, solar, bio-fuels and any other so-called "clean energy" sources you can think of?
If you've ever been in Beijing on a bad air day it's enough to scare the bejeezus out of you. I'm realistic enough to know that fossil fuels are going to be the main form of energy for some time to come, but that doesn't mean we can't have cars with better mileage, and not having to suck up to the middle east would be a good additional benefit.
What makes anyone believe that Comrade Obama actually WANTS America to have low-cost energy?
"once is accidental,twice is coincidence,three times is enemy action."
Comrade Obama blocked nuclear power by closing Yucca Mountain,is going after coal via EPA,has blocked Gulf and ANWR oil drilling,and is now going after fracking,doing everything possible to block US oil production. He killed the Keystone XL pipeline. Coal,oil,and nuclear is over 70% of US energy sources.
See a pattern here? there's a concerted effort by Comrade Obama to reduce US energy supplies,which DIRECTLY diminishes the US economy.
It's all part of his efforts to weaken the US economically,politically,and militarily.
Obama is also implementing UN Sustainable Development Agenda 21. According to the document (found it online) they say fossil fuel is unsustainable. This agenda is designed to replace the economics & social structure of the US I believe Romney has the same environmental agenda also because he believes global warming is man made & as gov, he had Gina McCarthy working for him & she now is in the EPA writing some of the regulations, thats being used to implment Agenda 21.Another item they call unsustainable is private property because it isn't social justice because not everyone can afford to buy then sell & make a profit. This agenda fully implemented will cause the US to be part of a communist one world gov.
Hey, the President stated his intentions to "bankrupt" the coal industry and his willingness to support higher gasoline prices at the pump so long as the increases were gradual. His energy secretary has stated that "we" need to figure out how to get gasoline prices at the pump up to "European levels." This is by design, not accidental.
Republican presidential candidates who would beat Obama over the head on the price of gas at the pump ought to be able to then speak to what could be done to lower them:
1) Increase US refinery capacity, which provides jobs and creates more end product (gasoline) domestically. 2) Reduce the taxes incurred on crude sold domestically to make it more profitable to sell oil here. 3) Increase domestic oil supply by fast-tracking drilling leases in the Gulf, the continental US, Alaska and, for gosh sakes, approve Keystone. 4) Stop printing so much money. The value of an ounce of gold and its relationship to a gallon of gasoline isn't that much different than it's historically been in decades. That means it's the currency that's worse less, not that a gallon of gas really costs much more.
So far I'm underwhelmed with the Republicans' ability to make any case against this regime.
"..last year, the domestic oil industry exported — yes, exported — about 1 billion barrels of crude oil and refined products worth some $100 billion. Those exports are creating jobs and helping America’s balance of trade." (from the first page of the article) It may be helping the balance of trade but why not help the American consumer?
I also understand the bulk of Keystone products would be exported? Is that accurate?
Good article except for the canard about investment in energy producing jobs ... energy industry is in the business of producing energy, NOT jobs! We could employ millions of people in the energy industry by handing every citizen a hand cranked generator and hooking them up to the electrical grid. Full employment, lots of $$ spent, not much energy produced but lots of pounds lost.
The metric should be how much energy is generated for how few $$ spent.
Obama told us all of this during the '08 campaign with his statement that "under my policies, energy prices will necessarily skyrocket." I hope there is no surprise on anyone's part that it's happening. It's one of the few campaign pledges that he has kept. And, the media doesn't even give him credit for it (contrast current coverage of escalating gas prices with the way it was covered during the Bush administration).
There is a reason that gas and oil companies are some of the biggest in the world. It's because they produce a product which is efficient, cost-effective, and people can use. When there is an alternative form of energy which can compete with gas and oil, the company that produces it will likewise become big and profitable. Quit wasting our money on these failed experiments.
Bad enough to subsidize American companies (in any field). But to give a billion dollars to a foreign company? No reasonable person can any longer doubt that Obama and crew belong in jail.
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