Quebec, long an economic basket case kept afloat by Canada’s federal government, has decided to open up its northern interior to resource development.  Quebec Premier Jean Charest announced on Monday an ambitious 25-year “Plan Nord” to build highways, airports, and other infrastructure so that the area can be developed.

According to Montreal’s Gazette, “Investments in energy development, mining, forestry, transportation, and tourism in the 1.2-million-square-kilometre region – twice the size of France – will create 20,000 jobs a year, generating $162 billion in growth and tax revenues of $14 billion.”   Large parts of northern Quebec are heavily forested, and there are major deposits of iron, nickel, gold, platinum, cobalt, zinc, vanadium, and rare earths.

The Obama Administration should follow Quebec’s good example.  The Department of the Interior and the U. S. Forest Service (an agency of the U. S. Department of Agriculture) control nearly 30% of the land in the United States, most of it in the West and Alaska, plus the Outer Continental Shelf.  Federal lands and offshore areas contain colossal reserves of energy and minerals plus the most productive forests in the world.  But the Obama Administration is locking up more and more federal lands and offshore areas in order to prevent oil and gas production, hardrock mining, and timber production.  And they’re trying to block coal mining in Appalachia by inventing new pollutants to be regulated.

Given the federal government’s looming insolvency, only environmental pressure groups could think that this resources lockup is good public policy.  At least the  House of Representatives, led by Rep. Doc Hastings (R-Wash.), Chairman of the Natural Resources Committee, is trying to force the Obama Administration to increase oil and natural gas production in federal offshore areas.  Last week, the House passed the first of three offshore bills and is going to vote on the other two this week.

H. R. 1229, 1230, and 1231, if enacted, would increase U. S. oil production by several million barrels a day and thereby reduce our trade deficit by hundreds of billions of dollars and create hundreds of thousands of high-paying jobs.  Moreover, unlike the clean energy economy and green jobs that President Obama keeps promoting, increasing oil production in the Outer Continental Shelf does not require taxpayer-funded subsidies.  Instead, oil companies pay billions of dollars at competitive auctions for the right to drill in federal waters and then pay royalties on every barrel of oil produced.

The semi-socialist government of Quebec gets it; the House of Representatives gets it; but unfortunately President Obama and his administration do not get it.  They insist on living in a fantasy land where federal spending rather than natural resource production creates economic activity.

I’ve written before about Obama’s tortuous logic when it comes to rising gas prices, and, this week, he again laid out “solutions” that don’t make any sense. Consider,

• Yesterday, the President implored Saudi Arabia to produce more oil. That is, he told the Saudis to “drill, baby, drill.” He did the same thing a month ago in Brazil. Meanwhile, U.S. production remains stunted by the Obama administration’s de facto moratorium on new oil and gas leases and permits. Why is “drill, baby, drill” appropriate for Saudi Arabia and Brazil, but not for the U.S.?
• Last Saturday, the President called for an end to tax breaks for the oil industry. He said, “They’re making record profits and you’re paying near record prices at the pump. It has to stop.” So, the President wants to end oil “subsidies” in order to relieve Americans pain at the pump. This doesn’t make any sense, because 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.
  [N.B. 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. A better way, as articulated by Rep. Paul Ryan, is eliminate ALL corporate welfare.]
• The President wants to take away oil industry “subsidies,” and turn them into green energy giveaways, because, he says, this will “reduce our dependence on foreign oil.” For starters, it’s unclear how investments in unreliable, expensive electricity produced by wind and solar would “reduce our dependence on foreign oil.” Moreover, in the past, Obama’s has dismissed “drill, baby, drill” on the grounds that it would take years to impact the global oil market. The President claims that expanded oil production would take too long to have an effect on the price of gas, but that increased taxpayer handouts to wind and solar would somehow “reduce our dependence on foreign oil” in a more reasonable time frame.  This is nonsensical.

Here’s something I didn’t expect: Quite a few “green” journalists on the energy policy beat have concluded that President Barack Obama’s moratorium on new drilling in the Gulf is seriously flawed. To be sure, the LA Times editorial board has come out in favor of an extended drilling ban, but among reporters who have spent time in Louisiana, there’s an acknowledgment that the moratorium is hurting livelihoods.

I was recently in Dallas, and there I had the opportunity to speak with a broadcast news journalist who had been reporting from the Gulf. He said the people of Louisiana hate BP, but they really hate the moratorium, and they are vocal about it. This is the same sense you get from the aforementioned liberal coverage. Evidently, it’s tough to be on location, and not come away with a sense that the moratorium is unjust.

With local reaction so strong, I wonder what’s going through Obama’s head. He’s been given two opportunities to back down-federal judges have nixed the moratorium twice. Yet the President plows ahead. The Interior Department is trying to re craft the drilling ban to pass legal muster.

He lost Louisiana by a wide margin, so maybe he doesn’t care. Perhaps this is part of a master plan to get a critical mass of oil rigs out of the Gulf, and force a demand response turn to a fuel efficient Ford Fiestas and GM Volts. That’s wacky, and mildly tongue in cheek, but still…

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