• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Obama on Energy: New Speech, Same Old Gimmicks

    Nearly a year ago, President Obama delivered a speech calling for an increase in oil and gas production. Since then, he has canceled more production than he has allowed. Today he delivered a speech at Georgetown University outlining a plan to cut oil imports by one-third by 2025.

    President Obama said when gasoline was $4 a gallon, “you had a lot of slogans and gimmicks and outraged politicians waving three-point plans for two-dollar gas—when none of it would really do anything to solve the problem.” Then he offered his own four-point plan to reduce dependence on foreign oil by: increasing oil and gas development; a fleet of natural gas/electric/fuel-efficient vehicles; biofuel production; and by 2035, making sure “80 percent of our electricity will come from an array of clean energy sources, from renewables like wind and solar to efficient natural gas to clean coal and nuclear power.” Let’s take these points one by one.

    1.)    Oil and gas exploration: We commend the President for re-committing to oil and gas production onshore and offshore in the U.S., which can create jobs and help lower prices without the help of the taxpayer. But until his Administration’s actions match his rhetoric, we remain unconvinced. Obama mentioned drilling off Alaskan coasts, where there are an estimated 19 billion barrels in the Chukchi Sea alone, but those resources are inaccessible—because the U.S. Environmental Appeals Board invalidated the Environmental Protection Agency’s permit approval for that area after appeals from environmental groups.

    The Administration needs to stop dragging its feet on permits in areas where we already have drilling rigs in place, like the Gulf of Mexico. The President criticized the industry for sitting on leases and not producing any oil or gas, but the reality is the industry wants to produce and sell oil. Kathleen Sgamma of the Western Energy Alliance stressed that a “lease is not a green light to drill—it’s the first step in a long, expensive process that is fraught with bureaucratic red tape and lawsuits by environmental groups determined to stop domestic energy development.” Furthermore, even when there is no oil production, there is activity on the leases, such as seismic and survey work to improve the success rate of extraction.

    2.)    Improving the U.S. vehicle fleet: President Obama emphasized strongly that increased domestic oil production will not reduce oil dependence on its own, saying Americans need to drive cars that run on electricity and natural gas and build more high-speed rail. This is not a plan to secure energy but to secure taxpayer dollars for pet projects that are either too expensive for the private sector to undertake or simply unwanted by consumers. Even with generous subsidies for production and consumption of electric vehicles, demand is low because they are still too pricey. The same holds true for natural gas vehicles. If they were economical or met a market demand, they wouldn’t need special subsidies. In some cases, there could be bureaucratic obstacles that distort the marketplace. When that’s the case, those bureaucratic obstacles should be removed, not mitigated with subsidies. When the government selects political winners, it’s usually a good indicator that the technology or energy source is a market loser. Cars, buses and trucks that run on natural gas will prove to be a good investment for producers and consumers when they don’t need government support.

    High-speed rail is no better. Heritage Senior Research Fellow Ron Utt explains in detail that “President Barack Obama’s high-speed rail program promises to spend hundreds of billions of dollars in federal and state funds to provide mediocre passenger rail service to an extremely small fraction of travelers.”

    3.)    More biofuels: Using subsidies and mandates to artificially create a market for biofuels will only hurt consumers, who pay for pricier energy, and taxpayers, whose money is used to support their production. The biofuel industry is built on production quotas, subsidies, and protectionist policies. The most popular subsidized biofuel, ethanol, produces less energy per unit volume than does gasoline, contributes to food price increases, costs taxpayers billions of dollars, and has dubious environmental effects. A new paper from The Cato Institute’s Indur Goklany finds that global biofuel policies are increasing death and disease by startling amounts in developing countries.

    The President said the U.S. should be more like Brazil, because more than half its vehicle fleet runs on biofuels. But he made no mention of the 54-cent tariff the U.S. government slaps on cheaper, more environmentally friendly Brazilian ethanol.

    President Obama made clear he was including biofuels from switchgrass, wood chips, and biomass. Despite the promise that cellulosic ethanol would be available by now in mass quantities, it’s not. Rather than more “investments” of taxpayer dollars, a more prudent approach would be to remove the subsidies and mandates for domestically produced ethanol and remove the tariffs on imported ethanol.

    4.)    A clean energy standard:  President Obama told party activists last night in a preview of his speech: “Let’s, yes, increase domestic oil production, but let’s also invest in solar and wind and geothermal and biofuels and let’s make our buildings more efficient and our cars more efficient.” Only a few of those ideas affect the transportation sector. Democrats and Republicans alike are guilty of claiming that we can end our dependence on foreign oil by increasing wind, solar, and nuclear production. Increasing production of these energy sources would affect electricity production, not transportation fuels. We use very little oil to produce electricity.

    One thing it would do is drive up electricity prices, which ironically would make electric vehicles less enticing. A clean energy standard would force Americans to use more expensive energy sources. If these energy sources were cost competitive, they would not need a government-guaranteed share of the electricity market. The mandate may reward certain energy producers in the short term but would hurt both producers and consumers in the long run, because it eliminates competition, reduces the incentives to lower costs, and encourages government dependence.

    It’s important to understand that oil is a global commodity. Its price is set globally, not locally. Attempting to produce all our oil domestically without regard to economics will only hurt American energy consumers. Whether we are a net importer or net exporter has no bearing on insulating Americans from price volatility.

    The objective of America’s energy policy need not and should not be energy independence. This is not because Americans should be dependent on foreign sources for their energy needs, but because market-based policies are a better way to ensure that every American has access to affordable energy.

    Posted in Energy [slideshow_deploy]

    15 Responses to Obama on Energy: New Speech, Same Old Gimmicks

    1. Fred Z from Florida says:

      The U.S. is not Brazil, Mr. President. Car ownership is much smaller there and people drive much less and over much smaller distances. Comparing the two countries is absurd. It is impossible for America to use Brazil as a model.

    2. kevin - Foresthill,C says:

      Thank you for the intellegence that comes with this article. As i read i saw facts more than opinions and not one line bashing those who think differently. It has been along time since a media outlet could produce facts and back up those facts with more facts. I am glad to see that there is still a news source that can.

      Thank you,

      Kevin

    3. Pingback: Obama on Energy: New Speech, Same Old Gimmicks | Big Propaganda

    4. Pingback: Obama’s Energy Plan | The Lonely Conservative

    5. Pingback: Nelson says ethanol key to reaching energy goals – Grand Island Independent

    6. Centennial, CO says:

      Again…the President filled the air with words of absolutely no substance.

      It is amazing to listen to these speeches of no message and we wonder why he wastes his and our time paying attention to them.

      He received a mandate during the last election, he said so, but has shown no leadership of any kind to take the reins and do the people’s bidding.

      Instead he leaves Libya “hanging” in the Nations air like a foul odor and goes on another lavish vacation with his family, determined to see every place on this earth on our “dime” before he gets voted out of office.

      He encourages Brazil to drill, so we can “buy” oil from them instead of giving our own people the jobs by drilling and exploring on our own soil and off shore.

      We are appalled at his lack of vision and lack of decisive leader ship. He needs to go…period before we as a Nation sink so deep into a hole from which we as people can no longer recover from.

      He never listens to the people anyway…Time for real positive, healthy change to save our Nation.

    7. Sandy, Ut says:

      OBAMA ….Why should the American taxpayer pay for YOUR pet projects?….ie:

      high-speed rail, electric cars, and other biomass, woodchips (hey remember we can't cut down trees because of the spotted owl) fuels.

      When these 'projects' stand on their own and are not propped up with

      taxpayer money then perhaps the American consumer will actually

      BUY the resultant product. Until then DRILL, DRILL, DRILL. We can

      DRILL our way out of this mess with our own oil. OBAMA…get out of the

      way for crying out loud and let American ingenuity take over. BTW…

      if you want to save some fuel and a HUGE amount of taxpayer dollars…

      stay off Air Force ONE, stay home and take care of the problems here. You're not the leader of Brazil, Spain, India, Germany, or any of the OTHER countries you have visited.

    8. Larry Huffman, Piqua says:

      Obama's speech is more of the same old unworkable stuff. Plus, he talks big, but then with the other hand, blocks what he claims to support. "Talk to the hand."

    9. Don, Kansas City says:

      With hybrid and full electric cars supplied with improved coal, smaller scale modern, distributed nuclear and nat gas power generation; nat gas auto fuel conversions, and higher mileage conventional gas and clean diesel we should be able to get it done without corn power, smoke and mirrors. We've got over a hundred years of natural gas, folks! Let's get innovatin'!

    10. Lloyd Scallan (New O says:

      Nothing in Obama's speech yesterday was truth. Every word was distortions or lies. Yet he has no fear of being found out because he knows full well the main stream media will protect him. All of his talk about exploration, green vehicles, clean energy, biofuels, etc are all diverstions to appease his radical environmentialist that actually believe Obama is about "saving the planet". If he is then why is he giving Brazil $2 billion of our tax dollars to drill in the same waters that he denies to U.S. companies. Could it be that his biggest supporters like George Soros is "still" invested in the Brazilian government oil company?

      Despite the rhetoric, the fact remains Obama is attempting to kill the U.S. oil industry to futher his agenda to distroy our economical system so he can replace it with socialism. It's not about "help the environment". Yet their are those out their that refuse or are too blind to recognize Obama true intent.

    11. John Merzlock says:

      George Soros , the greek billionaire and OBAMA"S mentor ,has purchased most of the Brazilian offshore leases that have been sold in the pastfew months.Over $2Billion of American foreign aid was given to Brazil last year for the development of their offshore oil reserves.Obama stands to benefit to the tune of millions of dollars personally after he is out of office! (Source: Glenn Beck). Is it any wonder why he is promoting Brazilian oil while he is stifling U.S. development and production!

    12. George Pajunen says:

      More empty words from a President of no change. From the lips of one who promised us the most open and above board administration. When he appoints Czars who are unaccountable to anyone and even there salaries are secret. Why believe a word he says? I don't believe he understands how much the rising cost of energy is going to cost this country or the world. Everything we buy is moved by something using energy and nothing is free from that cost. An that cost will kill the so called economic recovery.He has the bully pulpit and he can with executive order that it is a national emergency to become energy independent. To remove the power of the OPEC cartel by ordering a immediate order to drill for everywhere in our American borders. I doubt that he has the courage to do it. I just pray that we survive the next 2 years without run away inflation because of this administrations policies.

    13. Pingback: Obama Talks Energy. Long on Gimmicks. Short on Action. « American Elephants

    14. Mark Massengill says:

      We need to to away with the EPA and others who hindder our nation from using our natural resources, Obama is doing nothing to help America move toward energy independence. We need to put politicians in office that will make our nation energy independent.

    15. Thanks to the Rush Limbaugh wannabees this stuff is usually taken at face value.

    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.

    ×