• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • The President's Oil Spill Speech

    President Barack Obama delivered his first Oval Office speech on the heels of his latest visit to the Gulf region – the fourth since the Deepwater Horizon rig explosion in April.   With such an environmental and economic crisis present, the president needs to exert leadership to protect our precious coastal resources and clean up the spill.

    His message was the wrong one.  Instead, he continued to politicize the crisis by pushing for cap and trade legislation and to establish a separate claims fund – financed by BP – that will do very little to address the issue at hand.  President Obama is right in saying that the Gulf region will bounce back, but not with the policies of cap and trade and banning offshore drilling that he’s suggesting.

    Never Waste a Crisis – Pushing for Cap and Trade, Green Mandates:

    The President has been using the oil spill to push cap and trade and “clean” energy investments forward, but global warming legislation—placing caps on carbon dioxide emissions—would do nothing to improve clean-up or to prevent future spills. It would distract from the very efforts to clean up and stop the oil that must be the top priority now. Nor would emissions caps magically create new problem-free sources of alternative energy. Instead, global warming legislation would raise energy costs for all Americans and kill much needed jobs.

    Under a regime like the President proposed, higher energy costs would spread throughout the economy as producers everywhere try to cover their higher production costs by raising their product prices, further impacting Americans. The result will be a much slower economy and lost jobs at a time when the top priority for Americans is economic growth.  This is hardly the bounce back for the Gulf’s economy.  Implementing the House-passed Waxman-Markey cap and trade bill would put a chokehold on Louisiana’s economic potential, reducing the state’s economy by $8.33 billion in 2035. Beginning in 2012, job losses will be 21,832 higher than without a cap-and-trade bill in place. And the number of jobs lost will only go up, increasing to 31,468 by 2035.

    Furthermore, President Obama should not romanticize other countries’ renewable energy investments: 1.) Because countries aren’t simply shifting away from fossil fuels as he says they are and 2.) Because those countries that have made “real” investments in renewable energy are regretting their decision.

    China, for instance, uses much more oil and according to monthly oil report from the Energy Information Agency (EIA), “China may account for 40 per cent of this year’s expected rebound in oil consumption and nearly 45 per cent of oil demand growth in the next five years.”  To say that China is moving away from fossil fuels and towards a green energy economy is misleading, especially when coal provides 70 percent of the nation’s energy and 80 percent of its electricity.  It is projected that China’s coal capacity will nearly triple by 2030.

    The reason renewables provide a very small fraction of our nation’s electricity demand is that they’re too expensive without the crutch of the government. The other economic problem is that the government crutch pulls resources away from more productive use. Government spending will create some jobs to build windmills and solar panels and work at biomass plants but this diverts labor, capital and materials from the private sector that could be used more efficiently to create even more jobs. In effect, government subsidized green jobs destroy jobs elsewhere.  Moreover, government picking of winners and losers stifles the very innovation needed to bring efficiency and new fuel sources to the mix. If the United States should learn any lesson, it should be not to go down this road China is starting down and instead follow European countries lead and peel back support

    Creating an Independent Escrow Account:

    President Obama says BP and the government reached a voluntary agreement to create an escrow account – a separate fund to pay the economic damages of the spill.  How voluntary? We’ll likely never know.  The fund gives the public the impression that the President is really doing something and will likely stoke the flame of anger towards BP if the oil company raised any objection. However, the need for such a fund it is highly questionable.  BP is already hook for the cleanup costs and has pledged to pay for all legitimate liability claims.  Granted it is still early to measure how efficient the claims process is working. (BP has 600 claims personnel and paid over 20,000 of the 40,000 claims filed.) Claims that typically take 45 days to process and pay out are being accomplished in 48 hours.

    If anything, the government should ensure that the claims process is open and transparent to ensure expeditious, justified payments to those who suffered economically from the spill.  It will also ensure that overzealous lawyers aren’t able to take BP to the cleaners for illegitimate claims.  University of Maryland Professor asserts that the President’s demand for an escrow account could have such an effect: “By feeding public distemper, the President risks encouraging boycotts of BP by consumers and bond investors, outsized tort claims and the specter of excessive punitive awards. Together, those could destroy BP’s ability to raise cash and leave small businesses and ordinary citizens without the compensation they are due.”   And as the Wall Street Journal points out, politicizing the payment process could result in the independent party being a government-picked escrow administrator and payments could be granted to those affected by the president’s offshore moratorium.

    The Ban on Offshore Drilling

    The President also defended his ban on offshore drilling, but it is premature and will have significant adverse economic impacts. Offshore drilling provides about one third of the United States’ domestic oil. These much needed sources off our coastal waters have the potential to provide energy to every aspect of the United States economy at a time when fuel shortages that lead to increased energy prices can mean death to struggling industries. According to Burt Adams of the National Ocean Industries Association, in the Gulf Coast, more than 200,000 jobs are tied to the offshore drilling industry and 35,000 workers are directly involved each day when the rigs are in use. The American Petroleum Institute forecasts that if the drilling ban continues, more than 120,000 jobs could be lost in the Gulf Coast and key resources abandoned or moved elsewhere.  European nations including the United Kingdom and Norway do not intend to likewise cripple their domestic oil industries, but have decided not only to allow offshore oil drilling to continue, but also to sell leases to new drilling locations.  The President is also wrong to say we are headed towards peak oil and that we’re soon going to run out.  For more, see Heritage research fellow David Kreutzer’s response, “Not All the ‘Easy’ Oil is Gone Mr. President.”

    Separating Big Government from Big Business

    The President is at best premature, and likely wrong, when he says that we need new regulations to prevent such a catastrophe from happening again.  Rather, we need to end the inadequate and flawed deployment of those regulations through cozy relationships between the regulated and the regulator.  So, President Obama was right in that we need to revamp the Mineral Management Service.  However, it must be done in such a way that separates big government from big business. Reports of federal regulatory exemptions and passed safety inspections merely weeks before the explosion should raise harsh questions about the federal government’s responsibility and the role of regulation – despite the overhaul of the agency by Secretary Salazar. With its financial interests in energy production (royalty collection and taxes), the Mineral Management Service is seeing its interests and those of its corporate partners becoming closely aligned. This is perhaps part of the problem of offshore drilling regulations. Instead of blurring the line between public and private activities—and thus responsibilities—regulatory policy should focus on providing a limited amount of strong, fair, and efficient regulatory guidance. At a minimum, those elements of the federal regulator responsible for promoting specific energy sources should not also be responsible for enforcing regulatory standards.  This will require an overhaul of the Mineral Management Service that should be done prudently and lead to smarter regulation, not more regulation.

    Making rash policy decisions based on fears or other agendas will cause immeasurable damage to the United States economy, an economy that is still struggling to break free of a recession. Our capacity to shape our destiny has come from our system and very spirit of free enterprise; not from government as the President’s proposals would have us do. For a comprehensive plan of what the president should do, check out The Heritage Foundation’s Special Report: Stopping the Slick, Saving the Environment: A Framework for Response, Recovery, and Resiliency.

    Posted in Energy [slideshow_deploy]

    30 Responses to The President's Oil Spill Speech

    1. G Rome, Laguna Nigue says:

      One of the mantras of this nascent Administration stems from Rahm Emmanuel, that being that any crisis is also an opportunity. I would expect that such a desperate situation would be considered as an opportunity to solidify leadership, but it seems like this crisis is becoming an opportunity to further an agenda — that being of the "cap and trade" policy.

      I am disheartened by this possibility. I am quite in favor of an overall and consistent attempt to remove the United States from the teat of oil, but not at the disparate economic implications involved in a sudden and total move to that policy. I would expect my government to solve the problem first, especially something as dire and mass-affective as this, and then use the memory of it to fuel further legislation. It seems as if by remaining particularly absent from the actual and direct application of a solution, the Administration is attempting to build their case for further draconian legislation at the expense of so many lives and livelihoods (for the next decade plus).

      I think that many of the Heritage readers would like to find some reason to again believe in the idea that our government is looking out for our best interests, but that seems to be waning with each 24-hour newscycle.

      I would urge the Federal Government to fix the problem first, and immediately, and THEN worry about a further agenda. I doubt that any one of us in this nation has forgotten the images of Katrina, even while the years have gone by. This is no different, but the recovery will likely be longer considering how many aspects of such lives it has and will affect. Fix it, then worry about your re-election. With such an enormous and impactive problem, what is done now WILL be remembered later … and it seems like the library book is already far overdue.

    2. NTLB, New York says:

      B-P, does this stand for Brack's Pals, or bought and paid for? In the nearly two months since the explosion, the Administration has done nothing but stall. In the meantime, is there any doubt that B-P is finding a way to confine resposibility to a small subsidy of the entire B-P holding company? When the lawsuits finally do come, they will be against a small independent subsidy with very limited resources. It will be a sacrificial lamb, a small token allowed to die to protect the greater good. That good incidentally has been purchsed with campaing contributions going mostly to the DNC. I am not being cynical, I am seeing things as they are.

    3. Cristian, Union KY says:

      Is anyone supprised at that speach. Hannity and Rush both predicted it this afternoon.

    4. debby, new york says:

      My impression at the conclusion of Obama’s speech was mixed: disappointment at his poor portrayal as commander-in-chief of our country; incredulous he is still claiming the oil supply is running dry; and amazed he is so tone-deaf to the political and economic will of so many people in this country to push ahead with his cap and trade agenda. And also saddened at his hollowness and lack of true genuineness. And then as bad as it was, he transitions into the righteous preaching mode quoting the Bible, in a feeble attempt to bolster his message of hope. I feel cheated by the fraud, and determined to change the direction of this administration.

    5. Sandy Mamere, Portla says:

      This latest attempt to act presidential has fallen typically and tragically short. Typical, because you cannot make an instant leader from a one dimensional rhetoric specialist. It is tragic because lives and livelihoods hang in the balance, banking on the leadership required in such a catastrophic situation.

      2 November 2010

    6. Pam Johnson, CA says:

      You are right on the money with this article. Obama being what and who he is held true to form and did everything that should not be done to promote the true agenda.

    7. Roy, Abilene KS says:

      Very dissappointing performance. A political performance, no leadership genuinely demonstrated.

    8. Trinidad A. Williams says:

      What Oval Office addressed spill regarding the gulf's oil speech were you listening to? All your points and issue's were not verbalized, nor implied in the President's speech. Did you write this article prior to the aired speech? Were you listening to President Obama, or were you listening to yourself and the other article writer I commented on (re: MN Rep's projected words and phrasing that Obama WOULD BE saying) to decease assumptions as fact before the fact? It appear's you're both non-supportive of whatever the President is trying to accomplish and you're both so attuned to what you think need's to be done. Good, write in your suggestions as a citizen, as a media representative, as someone who has a valid suggestion, instead of using this platform to further undo the plea for a united front from ANYONE. Is this a principled method of fixing/finding solutions to an issue that is grievously painful to most Americans? Methink's you're both too comfortable in your niche to take a leap of faith and urge hope rather than the tunnel vision repetitive view you both share.

    9. Richard, Powder Spri says:

      Please, Will someone tell me where in our Constitution Obama finds the authority to force BP to create an Independent Escrow Account and to then decide who should doll out the money.

    10. Ben Gee, Canada says:

      Wake up, this is the 21 century. If the US want to be able to compete with China, it has to learn to play the game China plays. Sticking to the old game will not work. I give Mr. Obama credit for at least trying.

    11. DG - Los Angeles says:

      What is this I am hearing about the “Jones Act” which is blocking our ability to receive help from other countries?

    12. Pingback: The President’s Oil Spill Speech | Plug The Bleeping Hole

    13. L.J. says:

      Ah yes, never waste a crisis. If there is none, then create one. The message I want to send to all voters is check your state's senators vote on the EPA measure last week, June 10th, 2010. If they voted for it–then vote them out in November. They refuse to listen to us (the electorate) and are dashing headlong into destroying this country from the top to the bottom. The consequences of keeping them in office are INCREASED costs of living; they have made it almost unbearable to make ends meet and that's their plan. Making everyone dependent on a government handout is their goal–the true socialist/communist utopia. But the question is: where are they going to get the money to pay for all theses handouts and backroom deals when there are very few taxpayers left? Get them out of office and LET US (YES, WE THE PEOPLE) start building our government from the Constitution on up and let's push for a Constitutional convention whereby term limits are mandated and finally passed into LAW that cannot be repealed!.

    14. Tim AZ says:

      Dear Trinidad

      Why would anyone with the least amount of intellectual abilities support a president who refuses help from a multitude of countries to end this oil spill and clean it up before it could harm the environment that so many lives depend on? At the same time this president would have you believe that he really isn't intentionally allowing damage to come to the Gulf Coast in an effort to sanction echo fraud through govt. policy upon the American citizenry known as cap and trade. I suppose in the liberal mind the Golf Coast is an acceptable loss when the gain is expected to be a minimum of ten trillion dollars in a faked economy built on the notion of carbon credits. Not to mention the power that accompanies that kind of wealth. I guess this is what passes for environmental consciousness among the liberal elitists. Pay no attention to the left hand greasing the Golf Coast while the right hand counts the profits from the left hands good works.

    15. George VanderLoop - says:

      It would be irresponsible to continue deep-water drilling with out the industry's demonstration that they can stop the leak.

      What would be the Heritage Foundation response to a blow-out off the coast of Mexico or Cuba?

      The industry has to step up and stop the leak.

      Set a massive dome made of several interlocking parts over it. Float the dome out and lower it with buoys.

    16. G Murphy, Buchanan N says:

      I posted this elsewhere, but it truly belongs here….

      The president did not seem to fill the chair behind the oval office desk.

      One could see at once, the thinness of his neck, and a strange upward turning of his face, as if he could not quite master the acting role of seeming to be president, and so had to ape an FDR mannerism.

      Repeatedly during the speech, the viewer was left impressed only by the man’s lack of leaderly gravitas, his total inability to inspire confidence in himself, his rushing of the words, as if embarrassed at uttering one more half-lie after one more half-lie to a people who, as Lincoln noted, could not all be fooled.

      So he fulfilled his job requirements….for 19 minutes, talking to people who did not believe him. Visibly uncomfortable, he made us all wonder why he had sought the job in the first place, and we all understood.

      We all understood that getting a minority president was so important, that it was even worth elevating a man who never voted once while in congress, who never set policy for any group, organization, or political body, a man who had yet to learn what it means to lead.

      My sorrow for him, so ill suited to his fate, was only matched by my sorrow for America, in that I think he will get re-elected by purely ethnic mandate, leading the USA to hospice in my lifetime.

      God help us all.



      BP has more tech knowlege that the government, our government is greed, they should be working with BP to camp the well,take help from other countries, enforce the regulations that are now in place, open more drilling in colorado, alaska, etc.

      this mad, crazy spending for green will not save america, this is voting for another bill

      first, then we will learn whats in it..STUPID, and this you can't fix. This president is like

      a pimp, "I promise to take care of everything, but i will take all your money, but you will work or else" I am sick of the street law administration and the presidents empty words. i AM 70 YRS OLD AND THIS IS THE WORST PRESIDENT IN OUR HISTORY..

    18. Drew Page, IL says:

      This guy dispenses enough B.S. to fertilize all of America's farms. He should have been elected to the Office of the Secretary of Agriculture.

      He just couldn't wait to push his Cap & Tax nonesense.

      I have never been one to wish for an early end to summer, but November can't get here soon enough for me.

    19. Pingback: Drumbeat: June 16, 2010 | GREENDUMP

    20. Pingback: The Oil Drum | Drumbeat: June 16, 2010

    21. Pingback: Day 57 – He Gave Another Speech | SBRC Blog

    22. Arthur Krause says:

      Sandra, I've got you beat.. I'm older, Same comment, but I think pres carter backed goofball so he would not be considered the worst president! A seasoned, SMART (this guy is not smart) executive (ditto not an executive) would have moved to the gulf on day ONE. Had a competent team (not eco loons and Panther lovers) handle different problems, taken any international support he could get.Remember the reaching out apology freak-why not ASK for help from the world?? (arrogant maybe??) Guess the muslims have no skimmers or knowledge? I have flown mach 1.8 ac off small carriers, owned my own co in Japan, Been VP in fortune 500,Turned around 20mm co, Owned own business for 30 years. So understand just how incompetent this fool is.. God Help Us!!

    23. Ruth Mallek Virginia says:

      I am glad that someone was able to report on the speech. Honestly, when I saw the jestures of his hands and the position of the American and Presidential flags behind him, I knew that I could not listen to him!

      Both flags were positioned in a manner that extenuated their design. I have never seen the entire emblem of the Presidential flag until last night. The flag looked as if someone had intentionally opened it up to show " I am president "!

    24. Omri, Boston says:

      Actually, Norway just announced a halt on deepwater drilling until this incident is fully investigated. S

    25. Eugene Kupstas, Kins says:

      Our first priority is stopping the leak; BP has what technology there is. Our next priority is keeping all that oil off our Gulf Coast beaches and out of our fishing waters. Then, we clean up the birds and whatever sea life we can.

      Rearranging the industry and its lines of accountability should be done only after considerable thought from all angles — not in a way that imposes socialism or fascism (socialism with private ownership) much faster than the spill is cleaned up.

      One big question I have is, why did the government not act sooner? Some states with Republican leaders, such as Jindal's Louisiana and Barbour's Mississippi, were asking for help much earlier than they got it.

    26. Trinidad A. Williams says:

      Dear Tim AZ,

      I’m intelligent enough ~ and liberal enough to support the elected leader chosen by the electorate majority to represent our country and give him the due respect to decide and act on a course of action from suggestions that come from the citizenry, member’s of the Congress, Executive Administration, the Army National Guard, Air Force, Naval Coast Guard and hopefully the Maritime Union’s.

      The Merchant Marine Act of 1920 (P.L. 66-261) is a United States Federal statute that regulates maritime commerce in U.S. waters and between U.S. ports, Section 27, also known as the Jones Act, The U.S. Congress adopted the Merchant Marine Act in 1920, formerly 46 U.S.C. § 688 and codified on October 6, 2006 as 46 U.S.C. § 30104. The Act formalized the rights of seaman (see: Seaman (Admiralty Law)) which have been recognized for centuries. These are rights not afforded by common international maritime law so allowing foreign-flagged ships to engage in American domestic sea lanes would be like letting a foreign automaker establish a plant in the U.S. which doesn't have to pay U.S. wages, taxes, or meet national safety or environmental standards.

      May I correct you in your erroneous assumption that he refused help from other countries to utilize their ships and men to assist in the oil spill cleanup ~ in fact, there are foreign vessels with their crew members now working in the GULF OF MEXICO oil gusher spillage cleanup. I would think there had to be considerations regarding liabilities that could be, should there be happenings that involve the safety of foreign vessels and crew members ~ like who is responsible, our government or BP?

      Rep. Bachmann describes her state of mind as “shocked” ~ “confused” … commenting “it’s weird and it’s odd” … credit’s President Obama with an “infantile response” … and shazam, she injects “it’s almost like you’d wonder if this was a pretext to have cap and trade come forward” … into this entire mix. She need to grow up, take responsibility standing on her platform accusing the administration at pointing fingers and not doing something.

      From where I view this charade, it is infantile of her in her choice of words to describe the gravity and seriousness of dealing with the devastation and the tragic situation that the people in the gulf states contend with ~ she needs to grow up and present the case she is spouting, with verbiage that fit the happenings, as an elected person.

      And …might I add ~ you both talk with a “forked tongue” out of both sides of your face’s.

    27. G Rome, Laguna Nigue says:

      Trinidad A. Williams – Phoenix, AZ

      You use far too many technical terms, and cite too many portions of the law that have been constructed over the last 234 years to be considered worth reading. You are confusing the heck out of me. Please remove the stats, the citations, any other consideration of a foundation for an argument, and please begin any retort with words or phrases that include: "socialism," "despot," As Hannity and Limbaugh said," or perhaps something that is based in anger and has no rational construction.

      Only then will I hold dear to my Bible and my gun.

    28. Tim AZ says:

      Dear Trinidad,

      Your emperor wears no clothes. Citing antiquated laws that protect unions as an excuse for inaction by a president that tramples the Constitution with impunity isn't going to cut it. The previous President waived that union protectionist law in a weeks time choosing the interests of the the people after hurricane Katrina rather than Mao-Bama sacrificing the environment for union leaders and his own personal gain of wealth and power. I know you will be supporting and respecting the new President after the 2012 election as well as the Constitution. Just how did that hope and change work out for you?

    29. Pingback: Jindal vs. Obama: Time to End the Drilling Moratorium | Step Down Obama

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.