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  • 10 Ways the Obama Administration Is Hurting America's Energy Economy

    One of the few bright spots over the past few years in America’s economy has been energy production, but this has occurred largely in spite of this Administration’s energy policies, not because of them.

    And the simple fact remains that our energy economy could be even brighter, but egregiously burdensome regulations have stifled energy projects or threaten to dim the lights on the successful energy endeavors that have created jobs and increased supply to put downward pressure on prices. The President has doubled down on wasting billions of dollars to subsidize politically preferred energy sources. Although he has aimed to save or create jobs, in the energy sector he is destroying jobs, threatening to destroy jobs, or failing to create them.

    Here are 10 of the most troubling energy and environmental regulations implemented or proposed by the Obama Administration.

    1. Slowing energy production on federal lands. According to a recent report from the Energy Information Administration (EIA), energy production decreased 13 percent on federal lands in fiscal year (FY) 2011 when compared to FY 2010. The official moratorium and de facto moratorium as a result of a molasses-like permitting process reduced planned capital and operating investments by $18.3 billion and cost the Gulf more than 162,000 jobs* in just the past two years. Federal production in the West has experienced a similar fate: The Administration’s delays on permitting oil and gas projects public lands are preventing economic activity. In Utah and Wyoming, for instance, projects held up by the National Environmental Policy Act process is preventing the creation 64,805 jobs, $4.3 billion in wages, and $14.9 billion in economic impact every year.
    2. Failing to open areas to exploration and development. Where the Administration is destroying energy jobs on federal jobs, it is failing to create them by aggressively opening America’s federal lands and waters to exploration and development. According to a recent study from energy consultant Wood Mackenzie, allowing access to domestic resources and imports of Canadian oil would generate more than 1 million jobs by 2018 and more than 1.4 million jobs by 2030. The federal government would stand to benefit tremendously as well, collecting more than $36 billion as soon as 2015 and more than $800 billion by 2030.
    3. Delaying a decision on Keystone XL pipeline. The Keystone XL pipeline would bring up to 830,000 barrels of oil per day from Canada to the U.S., but President Obama punted the decision until after the election despite bipartisan support and despite the Department of State’s conclusion that the project would pose no significant environmental risk. The pipeline would create thousands of jobs, and the states through which the pipeline would pass—Montana, South Dakota, Nebraska, Kansas, Oklahoma, and Texas—would benefit greatly. The six states are collectively projected to receive $5.2 billion in property taxes in the course of the 100-year operating life of the pipeline,
    4. Tripling down on energy subsidies. America’s addiction to energy subsidies began well before President Obama took office. According to the EIA, the U.S. spent $8.2 billion on energy subsidies in 1999. That spending more than doubled to $16.6 billion in 2007. Rather than eliminating subsidies for all energy sectors, President Obama tripled down by providing $53.2 billion in the 2009 stimulus bill for energy programs. We have a diverse, competitive energy sector, but government subsidies merely concentrate power in Washington. Energy subsidies merely shift labor and capital away from economically viable projects that would actually help grow our economy to those projects that have political preference. Further, subsidies increase the incentive to lobby and perpetuate mediocrity in technological innovation by removing the incentive to lower costs and compete in the marketplace without the subsidy.
    5. Stifling all energy projects in red tape. The government’s assault on energy projects is relentless. The U.S. Chamber of Commerce identified 351 energy projects stalled by “not in my backyard” lawsuits, regulatory red tape, and, of course, endless lawsuits from environmental activists who want to quash these projects. Perhaps most surprising is the fact that almost half of these projects (140) are renewable-energy ones. These energy projects could provide a $1.1 trillion injection to the economy and create almost 2 million jobs.
    6. Shutting down coal. With 497 billion tons of recoverable coal in the U.S.—enough to provide electricity for 500 years at current consumption rates—coal has the potential to be an important resource long into the future. Regrettably, the Obama Administration has taken actions that significantly reduce coal’s share of America’s energy portfolio now and in the future. The Environmental Protection Agency’s (EPA) regulatory train wreck will prematurely shut down approximately 20 percent of America’s coal-fired electricity generation—enough to power 50 million homes. The EIA projects that 8.5 percent of the coal-fired generation capacity will come offline in the next four years.
    7. Using extreme and unprecedented power. In an unprecedented move, in January 2011, the EPA revoked a water permit issued by the Army Corps of Engineers in 2007 for a West Virginia mine. The U.S. District Court for the District of Columbia struck down those EPA procedures, calling them “unreasonable.” The EPA also proposed a more stringent revision of National Ambient Air Quality Standards (NAAQS) for ground-level ozone. Attaining that standard would have exceeded $1 trillion in costs between 2020 and 2030 and destroyed more than 7 million jobs by 2020; it was so devastating economically that President Obama had to request that EPA administrator Lisa Jackson withdraw the agency’s draft for more stringent NAAQS. The EPA’s Cross State Air Pollution Rule, which would compel companies to retire up to seven gigawatts of electricity generation and retrofit up to 576 plants, was struck down recently by a federal appeals court panel, which decided that the rule “transgressed statutory boundaries.” And the EPA, using inadequate and inaccurate information, is threatening to shut down the Pebble Mine in Alaska, one of the world’s largest concentrations of copper, gold, and molybdenum in the world that would create 1,000 high-paying jobs. The companies have not even applied for the permit yet, but the EPA is threatening to veto the permit because of an environmental analysis of a theoretical mine that would not come close to meeting state and federal standards for mining activities.
    8. Threatening hydraulic fracturing. The shale gas production as a result of horizontal drilling and hydraulic fracturing (“fracking”) has dramatically lowered natural gas prices, saving consumers money through lower energy bills but also lower prices for goods and services. In fact, the Yale Graduates Energy Study Group calculated that in 2010 alone, the consumer surplus (the consumer savings or gain from reductions in price) from shale gas production was worth over $100 billion. The abundance of natural gas makes the U.S. an attractive place to do business, especially for energy-intensive industries. Used in over 1 million wells in the U.S. for more than 60 years, fracking has been successfully used to retrieve more than 7 billion barrels of oil and over 600 trillion cubic feet of natural gas. Just 1 trillion cubic feet of natural gas is enough to heat 15 million homes for one year. Despite the length of time that hydraulic fracturing has been used, and despite the fact that the states have effectively regulated fracking, the Administration is proposing regulations that would be both unnecessary and duplicative and drive away opportunities for the safe development of affordable, reliable energy. In 2010, unconventional gas supported 1 million jobs in the U.S. and that figure is set to increase to 1.5 million by 2015, with an estimated $3.2 trillion in investments in unconventional gas over the next 25 years.
    9. Shutting down Yucca Mountain. The Obama Administration says it wants to pursue nuclear power, but its rhetoric does not match its nuclear policy. Its decision to abandon the Yucca Mountain nuclear waste repository project without any technical or scientific data is a case in point. With nearly $15 billion spent on the project, the data indicates that Yucca would be a safe place to store America’s used nuclear fuel. Yet the Obama Administration decided to terminate the program without having anything to replace it. Absent any nuclear waste disposal options, the U.S. simply will not significantly expand nuclear energy. In fact, the Nuclear Regulatory Commission has suspended its reactor licensing activities as a result of this failed policy.
    10. Attacking on consumer choice. The federal government finalized new automobile efficiency rules today for cars and light trucks for model years 2017–2025. The rules require an average fuel economy of 54.5 miles per gallon (mpg) in 2025. The government acknowledges that increased fuel efficiency standards will increase the upfront cost of a vehicle. Although the government also estimates that higher prices will be more than offset by gasoline savings, generally these cost savings assume that the buyer keeps the vehicle for its entire lifespan, which usually doesn’t happen. Further, consumers tend to drive new, fuel-efficient vehicles more, which reduces the estimated price, oil, and emissions savings. Higher prices reduce demand and force people to hold onto their older vehicles longer. Reduced demand means fewer cars produced, which means automakers have to shed jobs. Although not directly applicable to the Administration’s new rule, the Michigan-based consulting firm Defour Group projected that a 56 mpg standard would destroy 220,000 jobs. At the heart of the issue is consumer choice. Consumers have plenty of vehicles to choose from, including more than 160 different models today that get better than 30 mpg. While some may argue that the increased efficiency came as a result of mandated fuel efficiency standards that have been around since the 1970s, fuel efficiency has always been a top priority for consumers—whether they are purchasing compact cars, light-duty trucks, or heavy-duty trucks. The federal government shouldn’t be restricting that choice and determining what producers make and what consumers buy.

    *An earlier version incorrectly stated the number of jobs lost.

    Posted in Featured [slideshow_deploy]

    14 Responses to 10 Ways the Obama Administration Is Hurting America's Energy Economy

    1. Roger says:

      Well,

      If the coal industry invested in technology to clean up its act instead of just lobbying to be left alone perhaps coal could have a future. However, believe it or not, the majority of the population now believes that coal is a major contributor to climate change. The coal industry is not doing itself any favors by prolonging finding a solution to stay relavent – a task becoming even more difficult with natural gas prices falling. The fossil fuel industry can throw its money via the Citizens United decision at politicians to do its bidding but as we're now seeing in the polls for president, people, especially independents, are not responding in a positive manner to the Repulican party being hijacked by the far right. Until the Repulican party moves itself back to center it will continue to struggle. When it finally is jolted back to center climate change will have to be dealt with and coal will be the scapegoat. Why, because drought and extreme weather will continue and people will suffer at even higher proportions because of rising food prices. They'll want solutions form politicians and those who refuse will not fair well at the polls. Most Americans understand how the fossil industry is using social media to try and convince them that coal is necessary, but what the coal industry just can' t understand is Mother Nature holds the cards. Coal either needs to clean itself up or diminish until such a time where there are no other energy alternatives.

      • Guillermo Polo says:

        The majority of the population does NOT believe the LIE that coal is leading to climate change. Man caused climate chage has already been proven to be a hoax/lie.

        The problem is that unions and radical leftists have taken over the Democrat party and have perpetuated the lies in order to gain power and extort money to line their pockets.

      • historianMI says:

        I am curious just what background in science and technology "Roger" has. I have some, albeit not at the graduate level. Coal is the source of about 40% of U.S. electricity. It is vital to Chinese power production, also, (with very few regulations of the sort "Roger" seems to desire.) It has been the mission of energy producers for decades to improve, and optimize efficiency, to make generating plants more productive (and profitable) for the good of customers and investors. And power companies are strictly regulated by state and federal entities. The cost of electricity in SE Michigan has increased almost 100% in the last eleven years—-I have watched it. There IS NO alternative to continued use of coal for power generation (except rationing, which may just be the goal of " Roger" and others like him, they themselves being essentially exempted), and increasing population, ipso facto, means increased demand, and increased production. I will ignore his "the far right," "climate change" (global warming?," "extreme weather," "the fossil industry," "Mother Nature holds the cards,"—-and his final sentence,….."energy alternatives." Energy is the foundation of modern living and I don't believe "Roger" wants to give up HIS live style.

    2. Brian Joseph Keller says:

      Here is a good reading stating the extent of our Natural Resources. They are very abundant. However, there are things going on behind the scenes that are trying to stifle how much Natural Gas that we extract and use. These "things" that are going on behind the scenes are excessive government regulations and jealousy. Those two factors seem to be unnecessarily paired for some reason.

    3. does Obama have a secret-to-himself desire to destroy America? He has the economy totally screwed up with his policies and to listen to him is to know that a good part of him hates America—why are we putting up with him?

    4. Mike, Wichita Falls says:

      1. EPA – "it was so devastating economically that President Obama had to request that EPA administrator Lisa Jackson withdraw the agency’s draft for more stringent NAAQS"

      Who doesn't think these stricter rules won't go back into effect after the election? These have to be bad news if even Obama was convinced they were devastating.

      2. CAFE – "generally these cost savings assume that the buyer keeps the vehicle for its entire lifespan, which usually doesn’t happen"

      Now that we have to buy health insurance, you know for the public good, what's to stop them from making us buy "green" cars and keeping them for life, for the public good?

      These are the manifestations of utopia.

    5. Lloyd Scallan says:

      Does anyone now understand why Obama's action and non-action during and after the BP spill was so important to his plans to destroy our energy industry? Does anyone now understand why it was so important to Obama's plan for the blow-out preventer to fail and Obama's refusal to accept help from foreign countries to contain the spill? Well, it should all be becoming crystal clear now.

    6. DonHarper says:

      The Democrat motto is FORWARD??? Should be BARACKWARD!!

      • libertylouis says:

        The Obama/Democrat motto "FORWARD" was used in Communist/Marist Proproganda! This should tell anyone who knows their HISTORY, what Obama is made of.

    7. Roger says:

      Yes and 911 was an inside job to justify war by the Republican Party. Wink wink. Can anyone of you who posted submit an intelligent argument concerning the topic. In my humble opinion these types of responses signify why the presidential race is moving toward a reelection for Obama. Mainstream citizens are smarter and more perceptive than to buy into what is transpiring in politics today. The tea party movement is not representative of the majority and 77 percent now believe man is responsible for climate change and want less carbon dioxide emitted from businesses. This number will continue to expand as food prices and other related commodities rise. Social media and all other attempts at subterfuge will not trump Mother Nature. In the end, people will pay more to offset the world's rising temperature and the coal industry will not survive if it does not find a way to clean itself up. The Republican Party will realize after the election that it must disengage from the far right ideology and hopefully at that time will sit down with democrats and hammer out an energy policy that honestly considers the needs of our nation and future generations. Quoting Winston Churchill, "“You can always count on Americans to do the right thing, after they’ve tried everything else.”

      • Bobbie says:

        Ridiculous one sided Roger! Kool aid on sale today or are you paid to drink it? What is the far right ideology? Freedom, liberty and ones' pursuit of happiness? American principles? That is sooooo far right when you have no human qualities. Dignity for one…

        Republicans get no where sitting down with democrats and republican policies because democrats refuse America energy independent! Totally opposite of what they campaigned on in 2008. LIARS! If you're okay with lies, I feel sorry for you and pray there is a way to build your self esteem.

        Energy independence going strong in North Dakota! One state out of the nation. Democrats are dedicated to false claims of man made warming that has no solid evidence but convenient for manipulating purposes only and just to derive government money from it and induce behavior control. Democrats refuse to accept everything comes from nature with the refusal to acknowledge man can't control nature. It's beyond ignorant to suggest! Man learns to adapt and has throughout history!

      • libertylouis says:

        Roger, you need to stop drinking the Koolaide. The TEA PARTY does represent the Majority and 77 percent do NOT BELIEVE in CLIMATE CHANGE.

    8. TexasMom2012 says:

      Global warming may be happening but it is not man made. We are no where near the temps during the medieval warm cycle. At that time they were able to grow grapes for wine in England and Greenland was actually green. Ice ages and warming have happened on this earth prior to mankinds existence and will continue if we cease to exist. After all the scandles in the AGW communities it is quite obvious that they cannot "prove" the theory without cooking the books so to speak. There is no reason that we should bankrupt ourselves over a theory that is false, and btw, now the AGW skeptics are winning the argument. Science is never settled, real science is subject to question if another theory can be validated. At some point economic reality needs to be addressed as well. Green energy, other than hydro or nuclear, is not an economically viable source of energy and is especially egregious in its effects on quality of life for the poor.

    9. J E Houser says:

      History has taught us many, many times that progress comes only with a limited government and expaned free enterprise. Government workers know nothing except its ability to "No" to any change, any development of progress, or new ideas. It can only look at what exists and then curb its continuation and development.

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