All-of-the-Above or Anything-but-Fossil?
As a member of the McCain campaign that popularized the “all-of-the-above” slogan, I shudder at the president’s use of the term. While we used the phrase to talk about opening up energy development and innovation in every corner, Obama is trying to pacify disgruntled Americans who are sick of his “anything-but-fossil” energy policies. In a deft re-election tack, the president seems to have figured out that oil & gas development can actually be good politics. Unfortunately, he has yet to discover that it is also good policy.
This administration – contrary to their press releases – has hardly lifted a finger to increase production of oil & gas. In the State of the Union, the president proudly declared that he’d open more than 75 percent of our potential offshore oil and gas resources to development. This is part of Interior’s existing five year offshore leasing program, which comprises fifteen new lease sales in the Gulf and Alaska – fourteen of those sales in areas already being explored and developed under active leases. Moreover, this five year plan largely prohibits the study of offshore resources on the east and west coasts, including an area near Virginia that the Bush administration had slated to open, meaning we’re no closer to understanding what those resources look like. A real transformation in our offshore exploration policy would have opened up new areas to assessments of potentially recoverable resources – not more lease sales in the same areas we’ve been exploring for a generation.
President Obama also promised to open up shale gas development across the country. Shale gas is a fantastic opportunity to redefine the geopolitics of natural gas and create plentiful jobs in this country; a commitment to develop those resources would be meaningful indeed. Unfortunately, the EPA is starting to regulate the hydraulic fracturing process that the industry is using for the first time. EPA has already proposed a Clean Air Act rule requiring costly equipment targeted at drilling rigs, they are conducting research in preparation for new water regulations for those rigs, and they’re moving forward with regulation requiring disclosure of the fluids used while drilling, despite a successful voluntary initiative already underway. Leave it to this administration to find that three new regulations align with a pro-development stance.
Also troubling, but not new, is that the president again proposed to cut subsidies for oil companies to increase incentives for renewables. A true all-of-the-above energy policy wouldn’t penalize one energy source to benefit another. Obama would single out tax credits to oil companies in order to fund expanded subsidies for renewables through more grants, more loan guarantees, and more tax credits than they receive already. Our energy sector would function better, and our nation’s balance sheet would improve, if we equalized the treatment of energy across the board and gave all energy sources fair treatment. More dollars to favored industries interferes with a vibrant, competitive energy market.
I get it. If the president talks enough about his all-of-the-above policies, maybe we’ll forget about his abject failures in advancing the energy game. But more important are the things the president didn’t talk about. He left out all mention of the Keystone pipeline in his State of the Union, knowing it was an unpopular – and damaging – decision. He left out all mention of failed loan guarantees to Solyndra, which his administration approved despite Solyndra’s pitiful business plan. He left out all mention of the threat that EPA regulation has on energy producers and jobs, despite evidence that the compliance burden is unaffordable. He left out all mention of nuclear power. While a boom in shale gas makes the economics of nuclear power uncompetitive at the moment, Obama’s regulatory chokehold on natural gas just might mean a resurgence in the nuclear sector – and electricity prices.
If we didn’t need jobs, maybe Obama’s energy agenda could be mistaken as harmless folly. But we need a new domestic energy game that is truly all-of-the-above, pushing both development of our vast natural resources and innovation of the technologies that will fuel us tomorrow. The president’s empty promises are a guarantee for partisanship and gridlock in Washington – and limited progress in American energy.
This piece first appeared on the National Journal Energy & Environment Expert Blog