The Obama administration has found all sorts of ways to delay and deny American energy production, but the latest explanation for locking away America’s resources takes obstruction to new heights. In a nutshell, the administration’s position is that we shouldn’t bother developing American energy because it won’t make much of a difference anyway.
“Michael Bromwich, the chief regulator for US offshore drilling, on Monday waded into Washington’s growing debate about high oil prices, saying his agency’s pace of reviewing oil and gas exploration plans has no relation to the rising cost of gasoline.
“”˜Even if we permitted the hell out of everything tomorrow — every pending permit, some permits that haven’t even been filed yet — it would not have a material effect on gas prices,’ Bromwich said. “˜That’s the simple, clear reality.'”
(Platts, “US drilling regulator: “˜You can’t drill your way to lower oil prices’,” 04/25/2011)
Call it the Don’t Bother Doctrine.
Or the Just Don’t Blame Us Doctrine.
No matter what you call it, the result is more dependence on foreign energy sources, which means more price volatility, fewer jobs created here at home, and less American energy independence.
The problem is, this new round of excuse-making does not square with the facts. While the Obama administration is eager to derail oil and gas development today because new supplies will not immediately reach the market, this ignores basic facts about what drives energy prices.
Ultimately, prices in the world oil market are set by the fundamentals of supply and demand. However, crude oil prices at any given moment reflect a wide range of considerations that go well beyond immediate conditions in the market. In many cases, the immediate loss in output from any number of unexpected events has much less effect on the world market than the resulting shift in expectations about the ability to expand output over the next 5-10 years.
(Lucian Pugliaresi, President, Energy Policy Research Foundation: Testimony before the Energy and Power Subcommittee, 03/17/2011)
Moving forward on energy production today will not only influence prices by building in expectations about future output, it will also create good-paying jobs and lay a foundation for fewer imports in the future. Every barrel of oil produced here – whether through domestic production or partnerships with our North American allies – is one less barrel we will be importing from unstable, unpredictable, or outright hostile nations on the other side of the world. Sure, it takes time to go from the permits granted today through exploration and into production – but if the permits are never granted, the energy will never arrive.
The potential job creation attached to increased domestic energy production should not be ignored either. One energy expert testifying before the Energy and Commerce Committee has projected that producing an additional one million barrels per day of American energy could create one million additional jobs here at home, meaning economic security as well as energy security. But that doesn’t seem to have factored into the administration’s calculations.
The eagerness of the President’s appointees to write-off the potential of American energy resources also ignores the lessons of oil and natural gas in the last few years.
For example, less than a decade ago, experts viewed our domestic natural gas supplies much the way the administration views oil today: limited supplies that might be difficult to access mean the U.S. is doomed to depend on foreign sources.
“A key reason for revising Jefferies’ projected prices upward, analyst Frank Bracken III said, is that ”we have firmly concluded that production declines registered in both the United States and Canada are much steeper than previously expected.” The volume declines show “˜the limited extent to which the U.S. can ‘drill its way out’ of an increasingly difficult gas supply situation,’ Bracken said.”
(Inside F.E.R.C.’s Gas Market Report, Low Production Substantiates Bulls, but High Storage, Hydro Back Bears, 05/24/2002)
But the dire predictions of limited natural gas supplies and continually rising prices did not materialize. Instead, technological advances and freedom from government red tape have transformed the natural gas market. By 2009, the U.S. had become the largest producer of natural gas in the world. Prices have stabilized, supplies are abundant, and the U.S. will remain self-reliant for decades to come.
Those saying “we can’t” today were saying “we can’t” yesterday, and they’ll be saying “we can’t” tomorrow. If we can’t drill for energy supplies, it’s only because they won’t let us.
It’s a good thing America didn’t listen to the naysayers who said “don’t bother” with natural gas. The choice today is between the Obama administration’s admonition that we should not bother developing our existing and as yet untapped oil reserves, or Republicans’ long-term American Energy Initiative, which encourages an all-of-the-above strategy to develop all forms of American energy.