Obama Will Go It Alone on Raising Gas Prices

by Rory Cooper

For the past nine months, Pres. Barack Obama has unilaterally taken steps that will lead to higher gas prices for struggling consumers, and fewer jobs and economic growth for our nation. Now Obama’s handpicked oil-spill commission (made up of environmentalists and political allies) has recommended more steps that will take us farther down that path of needless economic chaos — and, unsurprisingly, President Obama has responded to this report by looking into additional unilateral actions he can take outside the oversight of Congress.

The commission report took its cues from President Obama, calling for more regulation, more government control, and less drilling. They spent considerable time criticizing systemic industry problems, even though they admit that the Macondo accident was a result of individual human error, and that over 2,500 deepwater wells have been safely drilled in the Gulf.

Nobody denies that important safety reforms are necessary in the wake of the tragic Deepwater Horizon accident and oil spill. In fact, the Heritage Foundation introduced a plan for reform in August 2010 that increased liability caps; created an insurance pool for claims over $1 billion; and installed safeguards against industry risk-taking. The Heritage model would’ve promoted safety; assigned full liability; protected taxpayers; and allowed oil and gas exploration to continue.

But the Obama commission apparently failed to consider the impact of reforms on taxpayers and on our energy industry. While the commission correctly included a focus on risk-based assessment for all individual offshore activities and operations, they spent entirely too much time appeasing environmental activists with proposals for ways to slow the industry down, like expanding the time it takes for a lease application to be reviewed and recommending a vast amount of new industry-wide regulations.

This is exactly what President Obama aims to do: slow down or stop entirely the drilling of fossil fuels in the U.S., raise the price of existing and new supply wherever it comes from, and use unilateral executive-branch action to make gas so expensive that alternative energy sources will become viable dollar-to-dollar.

Obama started down this track with his reckless across-the-board drilling moratorium, which was declared illegal by two federal courts.#more# President Obama persisted anyway, and even after announcing he was lifting the moratorium, continued with a de facto moratorium. In fact, since Obama “lifted” the moratorium, deepwater permit issuance is down 88 percent, with only two new permits in that time.

After the Obama commission’s report was issued this week, Sen. Mary Landrieu (D., La.) said: “The administration’s response to this tragedy — to impose a moratorium on all other deepwater drilling in the Gulf — was excessive, over-reactive and uncalled for, in much the same way as if the government were to ground all commercial flights pending investigation of a single plane crash. Nothing in these findings justifies the shutdown of an entire industry because of one mishap.”

Landrieu knows as well as anyone that the Obama administration’s motto is “never let a serious crisis go to waste,” and this crisis has given Obama a foothold towards his goal of higher gas prices in the United States. Energy Secretary Steven Chu said in 2008, “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” Outside the drilling moratorium, President Obama directed his Interior secretary, Ken Salazar, to ban offshore drilling in over 85 percent of American waters (even while he spends billions subsidizing Brazil’s offshore industry) and directed EPA administrator Lisa Jackson to impose new global-warming regulations on oil refineries.

The Hill reports that, in response to the commission’s report, President Obama asked the commission what else he can do unilaterally, without congressional approval: Commission co-chairman and former Democratic senator Bob Graham said, “[Obama] asked his staff to analyze what those areas of executive action were and said that he would take those under his advisement as to which ones to move forward on.” Graham also added: “We asked him to recognize that there are a number of our recommendations that do not require congressional action that could be implemented by executive order or by action of a specific department of the government such as the Department of Interior.”

It’s time to stop this madness. Gas prices are over $3 a gallon. Consumers saw the most expensive December gas prices ever in 2010. Jobs are being lost not only in the oil and gas industry but in the service industry and all along the struggling Gulf coast. Business owners cannot hire new employees if their bottom line is rising due to increased energy costs. Jobs are intentionally being destroyed by this White House.

While oil demand remains steady, America is losing its domestic drilling capacity, thanks to the president’s decisions. This obviously means we are more dependent on foreign oil and the cartels that supply it. That is not a recipe for price stability.

Federal government revenue is also suffering. For the first time since 1959, the U.S. could go an entire year without a lease sale. According to Heritage, as a result, the government will “lose more than $1 billion in bonus bids, less revenue from rental payments and significantly fewer royalties.” And state governments will also suffer forfeiting upwards of $100 million in tax revenue.

While it is the intention of the Obama White House to increase alternative energy consumption, the way to go about it is not to endanger the economy and carelessly punish their fellow citizens. If President Obama uses this commission’s report to further his ongoing anti-oil agenda, we’ll all pay for it…at the pump.

— Rory Cooper is the director of communications at the Heritage Foundation. He was formerly a senior policy adviser at the Department of Energy under President George W. Bush. You can follow him on Twitter @rorycooper.

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