President Obama & His Recycled “All of the Above” Energy Strategy
Amid all the grandiose, non-specific commitments to American energy and the gobs of subsidies, tax incentives, and handouts he threw around at the State of the Union last night, President Obama picked up on the same common conservative vernacular – and McCain campaign slogan – as White House press secretary Jay Carney, and told us he was committed to an “all-of-the-above” energy strategy. The only trouble is Obama’s all-of-the-above strategy is old, recycled policy, and America’s all-of-the-above strategy is aimed at future growth and energy independence.
Let’s look at what the president committed to.
Open more than 75 percent of our potential offshore oil and gas resources. This sounds like a major promise, but the president’s already made it. This past November, the Department of Interior released an offshore development plan providing for 15 lease sales in the Gulf of Mexico and Alaska that would allegedly open up access to 75% of offshore resources. But 14 of those sales are in areas already being explored and developed under active leases. The plan also inhibited any study of or exploration for oil and gas resources off the east and west coasts, despite substantial support for development in the Atlantic. This “commitment” has already been implemented and indicates a relatively minor change in our national offshore development strategy.
Take every possible action to safely develop natural gas. Hydraulic fracturing and directional drilling techniques used in tandem have opened up cost-effective access to unconventional forms of oil and natural gas more than a mile below the earth’s surface. The president himself admitted last night that this production is a major job creator; at the same time, his EPA is wading into regulation of the industry for the first time. Last August, EPA proposed a controversial rule requiring well operators to install costly equipment seemingly aimed at reducing greenhouse gas emissions. Today, they are preparing for potential new regulations by undertaking a nation-wide study on the possible impact fracking may have on water quality, despite all evidence suggesting that fracked wells do not contaminate water. They’re also moving to require disclosure of fracking fluids, despite a successful voluntary initiative already underway. Three burdensome regulations on an emerging industry largely comprising small businesses do not indicate any will to “take every possible action” to develop this significant, clean, and domestic resource.
Double-down on clean energy and end tax incentives for oil companies. In his last two budgets, the President proposed doing away with about $4 billion in annual subsidies for oil companies. This was greeted with celebration from the renewable sector and the environmental movement, groups that think ending subsidies for fossil fuels will immediately tilt the balance in favor of renewables. The only problem is that the president is actually proposing to do away with tax deductions that apply to many industries, certainly not just big oil, and will reduce incentives to develop domestic oil and natural gas. In any case, big oil is often already penalized, being allowed just a percentage of many of these deductions. Obama would use savings from assembling a punitive tax code to “double-down” on new, wasteful incentives designed to prop up companies and technologies that are not commercially viable on their own. This sounds like a lot of Solyndras all over again.
Develop enough clean energy on public land to power three million homes. Again, the president uses his State of the Union address to make an old promise all over again. In the 2011-2016 Strategic Plan, Department of Interior committed to approve 10,000 MW of renewable energy for installation on public lands by 2012 – roughly the amount of power Obama committed to last night. What’s more, Interior has already approved 27 projects to power upwards of 2 million homes, and the department is geared toward prioritizing California’s in-state goal of reaching 33% renewable power by 2020. On top of that, the president lauded a commitment by Navy to purchase clean energy. He didn’t explain that Navy has been working diligently toward installing solar and other renewable energy since 2008, and has recently invested heavily in the development of non-food based biofuels for ships, vessels, and aircraft. This is hardly a significant, new national commitment to renewable energy.
Give businesses incentives to eliminate energy waste in factories and buildings. People familiar with national efficiency policy might notice that this sounds an awful lot like last year’s Better Buildings Initiative. The only difference is that last night Obama moved past private-sector commitments to energy efficiency and an effort to retrofit federal buildings, and offered direct incentives to businesses to undertake these investments with government funds. What’s particularly remarkable is that the administration has worked at length to develop financial products that make energy efficiency retrofit financing more accessible, meaning private investment is already poised to take off. Federal subsidies for this work will only increase the deficit without any increase in efficiency investment or employment.
Let’s also look at what the president left out. He didn’t mention Keystone XL pipeline, ready to create thousands of skilled, private sector jobs at no expense to government. He didn’t mention loan guarantees to renewable companies like Solyndra, which we now know had a business plan poised for failure. And he didn’t mention the suggestions of his own Jobs Council to “expeditiously” move forward on an “all-in” approach to reduce our dependence on foreign oil and increase diversity in electricity generation.
President Obama might talk about his commitment to an “all-of-the-above” approach to domestic energy, but his real commitment is to old, recycled ideas. For the environmental lobby, that may be green enough.
