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Obama’s Energy Policy: Insanity

February 28, 2012

The United States has imported 103,644,130,000 barrels of crude oil from 1980-2010 or 3,454,804,333 barrels per year during that period. As of 2011, the Annual Average Domestic Crude Oil Price was $87.33 per barrel.

As a country, we’ve spent (on average, adjusted for inflation) $45.59 per barrel in the last thirty years. Following those adjusted figures, this equates to an average of $157,504,529,541.47 per year or $4,725,135,886,700 total during that thirty year span.

From June to November of 2011, the United States bought $37,929,375,530.00 worth of crude oil from OPEC.  This is a six month expenditure at the $45.59 per barrel figure, not the actual $87.33 per barrel annual average of 2011. That figure is $72,655,678,110.00 for imported OPEC crude in a six month period.

And these are only the OPEC figures.

We also imported 1,241,105,000 barrels of oil in addition to the crude we imported from OPEC. That’s an additional $108,385,699,650 in imported oil in a six month span for a grand total (all of our imports) of $181,041,377,760.00 in six months on imported crude alone.

This is the reason American O&G companies are all wound up about the current energy policies.

At a recent event, President Obama said,

“We need to reduce our dependence on foreign oil by ending the subsidies for oil companies, and doubling down on clean energy that generates jobs and strengthens our security…”

It was “reduce our dependence on foreign oil by ending the subsidies for oil companies” that got their attention.

The largest problem that I have with President Obama, is that his “clean energy” policy repeatedly operates while swimming in red ink.  His administration seems to be the most out of touch with how dependent we are, as a country, on fossil fuels for our existence and how ineffective “clean” technology (like solar and wind) has been at shouldering the burden.

His track record speaks for itself  according to the Natural Resources Committee. Those numbers and actions will give you an idea about what he is actually doing rather than what he says at press conferences.

President Obama has supported “clean energy” initiatives that have cost this country billions in guaranteed loans that will receive no ROI because his allocation of US tax dollars to multiple solar companies did not keep them from crashing into bankruptcy. (Solyndra, Evergreen Solar, SpectraWatt, Energy Conversion Devices, Solar Millenium).

The loans often came when those companies were already failing. I will say that again. President Obama guaranteed loans to failing companies, which filed for bankruptcy wasting billions in costs to tax payers.

He now announces a plan that backs “clean energy” and cuts fossil fuel subsidies.

He isn’t dealing apples to apples here. Reducing our imports of foreign Oil has little (less than 1% today, compared to approximately 10% in 1980) to do with energy production. He misled his audience.

Oil runs our vehicles and is the basis for most of our goods.

Energy is related to Natural Gas and Coal. He failed to make that differentiation.

The problem with his “plan” is that our country still needs to import 2,073,072,000 barrels of crude every six months in addition to our own production to operate, not to power our homes or businesses.  “Clean” energy accounts for less than two percent of our energy needs. Reducing oil imports has almost nothing to do with increasing that percentage. It would take diminishing the role of Coal and Natural Gas; so, it appears that he intends to cut fossil fuel subsidies across the board.

How does destroying an incentive to operate decrease our need to import?

While President Obama believes that our dependence on foreign oil will be fixed by “doubling down on clean energy” he cannot and has not provided the US with a plan that works or with one that is clear enough to explain without muddying the roles of various fossil fuels.

Throwing tax dollars to solar companies who do not produce energy (because they are bankrupt) and reducing our need for imported crude (which isn’t really related to energy) is not a plan.

I have said it before: you can’t make clothing or oil related materials like vulcanized rubber from sunshine, nor do cars run on beautiful cloudless days.

This is a world market.

President Obama: the market killed those solar companies because they are inferior as an energy source and their technological advancement is weak. It is the world market that controls what oil prices look like, not the Republicans. Bankrupt solar companies don’t give us power or reduce our need for imported crude when they sell their assets.

The people who spend money say so; take some notes and wake up.

Obama mocks Republicans for their pro-drilling policy but offers no functional alternative; drilling more at home, utilizing our shales, and ceasing to regulate in excess is a guaranteed way to be less dependent on foreign oil because we will use more of our own. You can’t overhaul a system whose life-blood is oil by supporting technology that is incapable of doing the job, especially when you don’t differentiate the difference between the roles of Natural Gas and Oil. Obama’s plan is aimed at removing our need for Oil & Gas. We can’t. We are years and years away from being capable of doing so.

I think the President is confused. Perhaps a history lesson will help.

Before Steve Jobs came back as the innovative rescuer of Apple, the company was all but dead. Those who invested in the company before his return saw what happened to their investments between 1988-1993. However, and in stark contrast to the previous trend, those who invested in Apple right before the advent of the iPod will attest to the fact that there is such a thing as “wise investment” and a “good time to invest”.

After Jobs came on board, Apple created a product that people would buy and keep buying. This is why Apple was successful: they had something that people would spend for, and an revolutionary evolutionary development process. Their innovations performed a function that caused people to wait in line to throw money at: first the iMac, MacBook, iPod, iPhone, and then the iPad.  So, using Apple as an example, there is a good time and a bad time to invest in technology and there is good and bad innovation.

Barack Obama, has proven that he is a terrible investor and a bad judge of good innovation.

He bets on losing horses (Solyndra etc.) and then tries to change that fate by changing the rules of the race (moratoriums, punting pipelines, slow permitting etc.).

By killing O&G and inhibiting that industry to do what it is capable of, he has attempted to re-emphasize the “clean” technology he supports…but he espouses that this is all the fault of the Republicans and the dismal economy he inherited. Bush didn’t impose a moratorium or punt the safest and the most economical means to transport oil from Canada to the GOM.

Bet on a winning horse, Mr. President.

According to his State of the Union, he understands the potential of home grown fossil fuel production, he even tried to take credit for it, but I can’t help believe that this was only a talking point to silence his critics. I know this because his new budget proposal cut subsidies for O&G. So if this administration realizes the potential for Oil & Gas here at home but does nothing but oppose it, what does that say?

His choices, not his words, for solar and against O&G have cost Americans jobs and money; real jobs and real money. The drilling moratorium and Keystone XL punt have cost Americans jobs and money. The guaranteed loans to failing companies have cost the American citizens jobs and money.

The moratorium alone has cost the US $24 billion and caused multiple companies, like this one, to go bankrupt and lay off employees during a recession; or this one, who is struggling to keep their employees employed after they rebounded following Hurricane Katrina.

President Barack Obama’s energy policy is costing America the very thing he keeps promising: jobs. It does not have to. It can create them.

His actions prove that he is following an ideological, politically affiliated, Green Dream that puts current employees out of work. Make no mistake, this is happening right now.

And now he is allocating $14 million to algal fuel research.

Insanity.

Obama is allocating funds to failing enterprises at a time when our government is supposed to be saving money. Instead of cutting off the dead, non-productive limbs, he looks to save money in other ways: he intends to make our veterans and military make up the difference by cutting their benefits.

He plans to save money by going paperless and painting roofs white.

While speaking out of both sides of his mouth, Obama tries to take credit for increased Oil production, his execution proves that lip service to be hollow.

As the Washington Examiner reports

“Oil industry leaders reject Obama’s claim to have given significant support to oil production. ‘These have been the most difficult three years from a policy standpoint that I’ve ever seen in my career,’ Bruce Vincent, president of Swift Energy, an oil and gas company in Houston, said yesterday. ‘They’ve done nothing but restrict access and delay permitting.’ “

And now the administration is cutting subsidies.

In summary, the energy plan looks like this: spend money on risky and non-productive Green ventures that comprise a relatively miniscule ROI while penalizing a proven industry which thrives. Confuse the American public by failing to clarify that Oil doesn’t produce a whole lot of energy. Also fail to mention that Solar and Wind produce about as much energy as Oil. Take credit for the thriving industry while attacking them with policy and ignore all of the failures.

Yeah. That sounds about right.

Let me reiterate. Insanity.

A political, re-election agenda shouldn’t have a place for a civil servant. Stop burning the money we work so hard for. Stop fighting against the spirit of American industry that built this great country.

Stop the insanity.

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