Obama energy plan: A true step forward?

02 04, 2012 by Daily Advertiser

This week, the president laid out an energy plan in the State of the Union Address touching on the success of the current shale oil and gas plays, his new regulatory plans for hydraulic fracturing, and also opening up additional space for drilling offshore. There was no mention that the productive shale plays have found the majority of success on private lands, and not on their counter-part federally controlled lands. The president, did however, press hard for Congress to pass "clean energy tax credits" that would in turn create jobs. His plan to double down and kill the incentives of the oil and gas industry only promotes green energy and tax cuts for wind, offshore wind, and solar power. These green sources of power simply can't compete with natural gas due to their prices being exponentially more costly to produce.

The American Petroleum Institute, the top oil and gas-lobbying group, said the policies Obama promoted in his speech are at odds with expanding energy output. "It's a contradiction because he calls for further regulation that will slow down the production of energy and then increasing costs by raising taxes," said the institute's president, Jack Gerard.

Another debate centers on the use of hydraulic fracturing, also known as "fracking". The president's new plan demands that all companies disclose to their state government what chemicals are being used in the operation of fracking. Louisiana leads the pack in this reporting process with the Department of Conservation having full

oversight of the oil and gas industry. There is absolutely no need for the EPA or the federal government at large to be involved in the states daily operations of oil and gas exploration and production. In the past four years, the Haynesville Shale has become the largest natural gas field in the U.S., using safe technology and community awareness.

The State Department's announcement last week that the Keystone XL pipeline permit would be denied comes as a blow, not only to the oil and gas industry as a whole, but to the economy and the jobs market. With the potential of adding 20,000 jobs to an already flailing economy, it makes little sense to shut the project down. The president has stated over and over that the United States needs to become less dependent on foreign oil. This project alone would transport more than 70,000 barrels of synthetic crude oil per day into the U.S. from the Athabasca Oil Sands in northwestern Canada. The potential of this Keystone project and the Obama administration's rhetoric on their energy policy, simply doesn't match up.

The president plans to open up an additional 75 percent of offshore resources to which the oil and gas industry obviously supports. What and where these areas will be located is yet to be determined. On Thursday, BOEM announced a planned lease sale to be held this coming summer for the central Gulf of Mexico. The lease sale is actually part of the 2007-2012 plan put in place by the Regan Administration. The lease sale is combining lease sale 216, which was scheduled for last spring and canceled by President Obama, with lease sale 222 which is scheduled for next March.

"Announcing a scheduled lease sale that doesn't open any new areas for energy production and that should have happened a year ago shouldn't be a `major announcement,' " said Republican Representative Doc Hastings, chairman of the House Natural Resources Committee.