In response to the 1973 OPEC oil embargo, Congress in 1975 passed the Energy Policy and Conservation Act, which directs the President “to promulgate a rule prohibiting the export of crude oil” produced in the United States. Congress’s oil export restrictions, like virtually all limits on international trade, are bad policy. Nonetheless, in this instance, the Congress at least was heeding the prevailing political winds (if not reason): the OPEC embargo caused public panic, and banning oil exports was a knee-jerk response to the political mood at hand.
As time passed from this initial panic, legislative prohibitions on oil trade made decreasing sense. And during the past five or so years, a time when American production has boomed thanks to a technological revolution colloquially known as “fracking,” the export ban has become downright stupid. It is, therefore, a welcome development that House of Representatives leadership today in Houston is expected to announce a strategy to advance H.R. 702, legislation that would forbid federal officials from imposing or enforcing restrictions on the export of oil. This *common sense* bill was introduced by Rep. Joe Barton (R-Tex.) and enjoys healthy bipartisan support.
During a briefing yesterday, White House press secretary Josh Earnest was asked whether the Obama administration has a position on H.R. 702, and his response says a great deal about the sorry state of energy policy in the age of Obama. I’ve reposted his answer below:
MR. EARNEST: [W]e’ve got a position on this, which is that this is a policy decision that is made over at the Commerce Department. And for that reason, we wouldn’t support legislation like the one that’s been put forward by Republicans. And so this is — so for an update on our position, if one is necessary, you can consult with the Commerce Department.
The one thing that I would note is that this policy announcement is being made by Leader McCarthy in front of an organization in Houston that is largely funded by four or five of the biggest oil companies in the United States. So it is pretty clear, once again, where Republicans in Congress and their political benefactors stand when it comes to their energy policy priorities.
[Editor’s note: Here, Earnest is referencing how House Majority Leader Kevin McCarthy is expected to announce leadership’s support for H.R. 702 today at an oil and gas trade association in Houston.]
The fact is I think Leader McCarthy has an opportunity to demonstrate some true political courage where he could go and stand before that organization and actually offer up something bold but also common-sense, which is to end the billions in subsidies that oil and gas companies in the United States already enjoy, and actually use that money to ensure the long-term success of our economy and the energy sector in this country by making important investments in things like wind energy and solar energy — investments that even some of those oil companies themselves have bragged about making.
Earnest’s extraordinary response has two components that warrant exploration.
First, he states that the administration will oppose H.R. 702, because the purpose of the legislation—ending export restrictions—is “a policy decision that is made over at the Commerce Department.” Let’s unpack this a bit, because it says a lot about this administration’s tendency to accrue power.
As I explain above, Congress in 1975 passed a law (EPCA) whose purpose is to restrict the export of oil produced in the U.S. Today, congressional leadership wants to pass a law that would lift such restrictions. Congress passes a law; Congress rescinds the law. That makes sense to me, but not to the President. According to the Obama administration, it’s not Congress’s place to amend its prior laws. Instead, any such alterations are properly “a policy decision that is made over at the Commerce Department.” That is, these decisions are best left to the Executive Branch. Of course, the administration’s “position” is totally impermissible from a constitutional perspective (separation of powers and all that). Nevertheless, Earnest’s response speaks volumes about Obama’s approach to governance. This administration thinks policy should originate in a second term president, by phone or pen, rather than Congress.
It’s harder to make sense of Earnest’s second comment, about how House leadership should abandon its push to open American oil production to foreign markets and instead subsidize solar energy and wind power. I, for one, am confused about the connection. In answering a question about trade policy, the press secretary says House leadership should adopt a new tax policy. Moreover, wind and solar power are electricity sources, while oil is a transportation fuel, so he’s discussing totally different markets. Is Earnest suggesting that the proper “policy decision” on oil exports is to have Commerce tell the I.R.S. to change the tax code without a delegation from Congress? What is he talking about?
To me eyes, Earnest’s answer demonstrates both the Obama administration’s urge for authority, but also its desultory goals. I submit that these factors are the common denominators of O’s energy policy. And I’ve even coined a term for his energy policy: aimless authoritarianism.
Regarding the “aimless” part, consider:
- When the President wants to get elected, he is a friend to oil and gas producers. When, however, he’s safely insulated from electoral accountability in his second term, he bemoans “Big Oil” machinations that supposedly undermine his green energy subsidies and other climate goals.
- When the price of gas is high, the President seeks to end motorists’ pain at the pump by ending “tax breaks for the oil industry.” Of course, the effect of oil industry “subsidies”*** is to lower the price of oil. It’s a market distortion meant to lower the cost of producing oil. By removing these “subsidies,” the price of oil would better reflect the forces of supply and demand, and it would increase.
- Similarly, the White House claims that plummeting oil prices are “good for the U.S. economy”. He also claims that greenhouse gas emissions reductions are good for the U.S. economy. Of course, the purpose of policies to reduce greenhouse gases is to makes fossil fuels, including gasoline, more expensive, so that consumers use them less. The administration has never tried to explain this contradiction in goals.
- Abroad, the President implores Saudi Arabia and Brazil to produce more oil. Basically, he told the Saudis and Brazilians to “drill, baby, drill.” But he denigrates that idea at home (sometimes; see above bullet points).
Regarding the “authoritarian” part, consider:
- Congress repeatedly has demurred from passing a cap-and-trade energy rationing policy. Indeed, the President ran from climate change during his 2012 reelection campaign. However, after he won a second term and became safely insulated from electoral accountability, Obama announced in the summer of 2013 that congressional inaction on climate change was a justification for his administration to impose a climate change mitigation policies. The EPA has since published a regulation (the Clean Power Plan) that would impose a federally-administered cap-and-trade on any State that is unwilling to go along with the administration’s climate policy plans.
- With respect to federalism, the aforementioned regulation—the Clean Power Plan—would strip State governments of their authority to oversee retail electricity markets, which has been their exclusive preserve since the New Deal.
- The President seeks to cement an environmental legacy by achieving an international agreement to mitigate climate change at the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change this winter in Paris. To be sure, the President wants the agreement to have teeth—after all, his legacy depends on it. But he wouldn’t dare submit it to the Senate for advice and consent, because he knows it would fail in a bipartisan manner. So instead he’s trying to pass it off as a “politically binding” (instead of “legally binding”) treaty, in an effort to (again) avoid Congress.
- The administration’s efforts to amend the Clean Air Act (by executive fiat).
- The administration’s efforts to amend the Surface Mining Control and Reclamation Act.
***[Editor’s note: To an extent, I agree with the President on this one—loopholes in the tax code are a form of corporate welfare that should be stopped. That said, these tax breaks aren’t unique to the oil industry, and singling it out only makes the tax code more complicated. The best way is remove all forms of corporate welfare.]