I’ll admit, I’m a little jealous that my take on President Obama’s approach to the shale gas shock hasn’t gotten as much play as Stephen Moore’s weekend interview with the energy entrepreneur Harold Hamm, but I console myself with the knowledge that Hamm is a pretty impressive figure. And Hamm also offers insight into how the president thinks about America’s energy future:
Mr. Hamm was invited to the White House for a “giving summit” with wealthy Americans who have pledged to donate at least half their wealth to charity. (He’s given tens of millions of dollars already to schools like Oklahoma State and for diabetes research.) “Bill Gates, Warren Buffett, they were all there,” he recalls.
When it was Mr. Hamm’s turn to talk briefly with President Obama, “I told him of the revolution in the oil and gas industry and how we have the capacity to produce enough oil to enable America to replace OPEC. I wanted to make sure he knew about this.”
The president’s reaction? “He turned to me and said, ‘Oil and gas will be important for the next few years. But we need to go on to green and alternative energy. [Energy] Secretary [Steven] Chu has assured me that within five years, we can have a battery developed that will make a car with the equivalent of 130 miles per gallon.’” Mr. Hamm holds his head in his hands and says, “Even if you believed that, why would you want to stop oil and gas development? It was pretty disappointing.”
This does seem somewhat strange. A marked increase in battery life might be a very good thing indeed. But what does that have to do with whether or not we should unlock vast supplies of natural gas and oil embedded in shale formations?
Hamm goes on to use somewhat colorful language to describe his run-ins with various regulatory agencies.
Washington keeps “sticking a regulatory boot at our necks and then turns around and asks: ‘Why aren’t you creating more jobs,’” he says. He roils at the Interior Department delays of months and sometimes years to get permits for drilling. “These delays kill projects,” he says. Even the Securities and Exchange Commission is now tightening the screws on the oil industry, requiring companies like Continental to report their production and federal royalties on thousands of individual leases under the Sarbanes-Oxley accounting rules. “I could go to jail because a local operator misreported the production in the field,” he says.
The White House proposal to raise $40 billion of taxes on oil and gas—by excluding those industries from credits that go to all domestic manufacturers—is also a major hindrance to exploration and drilling. “That just stops the drilling,” Mr. Hamm believes. “I’ve seen these things come about before, like [Jimmy] Carter’s windfall profits tax.” He says America’s rig count on active wells went from 4,500 to less than 55 in a matter of months.
North Dakota has a flourishing economy, and it’s entirely possible that the northern Great Plains can do without a massive increase in energy and investment. The same can’t be said of states like Ohio and Pennsylvania, where the development of the Marcellus and Utica shale formations promises real economic dividends. It is not encouraging that the White House seems to have written off these states in favor of a focus on the “Monied ‘Burbs.” John Harwood writes:
Mr. Obama’s strategists intend to use abortion, gay rights, the environment and successes in the fight against Al Qaeda to counter economic attacks and drive a wedge between Republicans and swing voters.
The Democratic shift from defense to offense on those issues stems from evolving public attitudes, intensifying Republican conservatism and the raid that killed Osama bin Laden on Mr. Obama’s orders. The perilous state of the American economy undercuts the president’s assertions that he prevented something worse.
The result: over the weekend, Mr. Obama accused his Republican challengers of displaying a “kind of smallness” by not denouncing a debate audience that booed a gay soldier. He used the incident to question their readiness to become commander in chief.
Days earlier at a California fund-raiser, Mr. Obama cast his re-election bid as an appeal to “people of like mind, people who believe in a big and generous and a tolerant and ambitious and fact-based America.”
Those “people of like mind” include the affluent, college-educated residents of suburbs around Denver, Philadelphia, Raleigh-Durham, Orlando, Boston and Washington — the epicenters of Mr. Obama’s fight for Colorado, Pennsylvania, North Carolina, Florida, New Hampshire and Virginia.
The Rust Belt is conspicuously absent, with the exception of Pennsylvania. And of course the strategy is to use a cultural argument to win the Philadelphia and Pittsburgh suburbs rather than the state’s interior.