The White House has finally realized that there is a close correlation between rising gas prices and dropping presidential popularity ratings, and so President Barack Obama has begun flailing around to try to deflect the blame. Normally, I would sympathize with the President’s predicament. Oil prices go up and down as a result of global supply and demand. But in this case, I think the President deserves all the blame he’s going to get from the American people.
President Obama and his Administration have done everything they can to reduce domestic oil and natural gas production. The Department of the Interior has cancelled leases on federal land in the West, delayed and denied permits necessary to start drilling on leases (which, remember, are awarded by competitive bid and have already been paid for), restored an executive moratorium on leasing most federal offshore areas, denied a permit to a lease off the Alaska coast for which Shell paid $2.2 billion and has already invested $4 billion, and placed a moratorium on new drilling in deep and shallow waters in the western Gulf of Mexico (the only major offshore oil field in the U. S.). Since lifting the western Gulf moratorium earlier this year, Interior has been slow-walking the approval of drilling permits. The President also steadfastly opposes opening the coastal plain of the Arctic National Wildlife Refuge to oil and gas exploration.
Although President Obama said in a recent speech that the U. S. was going to have to produce more oil, the Department of Energy’s Energy Information Administration has projected that domestic oil production is going to decline significantly in the next few years as a result of Administration policies. The dropoff would be much steeper were it not for the rapid expansion of production in the Bakken field in North Dakota and Montana. The Obama Administration has not been able to slow production there because all the land is privately owned.
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Coal
Clean Water Act: The EPA has invented a “pollutant”— salinity—in order to stop surface coal mining in Appalachia. It claims that this “pollutant” harms an order of short-lived insect, the Mayfly, which has not been proposed for listing as an endangered species. The EPA has set a numeric water quality standard for salinity which effectively bars new surface coal mining permits.
Surface Mining Control and Reclamation Act: Despite the fact that the 1977 SMCRA explicitly authorizes “valley fills” (a necessary byproduct of surface coal mining in the steep terrain of Appalachia), the Department of the Interior is working on a re-interpretation of the so-called “100 feet buffer rule,” a regulation derivative of SMCRA, which would effectively outlaw valley fills, and, as a result, Appalachian surface coal mining.
Oil and gas
Red Tape: The de jure moratorium on deepwater drilling permits in the Western Gulf ended on 22 October 2011, but the de facto moratorium remains. Two weeks ago, a federal judge in eastern Louisiana (the same one who overturned the first moratorium, and who then found the Department of the Interior in contempt for issuing an identical, second moratorium), ordered the Interior Department to act on 5 pending permits within 30 days. Interior is also slow-walking shallow water permits.
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Maryland
Offshore wind energy is so expensive that even the Democratic-controlled State Legislature is balking at the price tag of Maryland Governor Martin O’Malley’s (D) proposed “Maryland Offshore Wind Energy Act.” The legislation would force the state’s investor owned utilities to minimum 20-year contracts for 400 megawatts to 600 megawatts of offshore wind power. Governor O’Malley’s office estimates that the legislation would cost ratepayers about $1.50 a month, but this projection is based on unrealistically optimistic assumptions. Independent analyses peg the costs at up to $9.00 a month. The disparity in estimates has elicited a negative response from O’Malley’s own party in the legislature: the Washington Post reported this week that two Democratic lawmakers key to the bill’s prospects have suggested they need more time to vet the legislation than is left in this year’s session.
Kentucky
By a bipartisan vote of 28 to 10, the Kentucky State Senate last week passed a resolution exempting the coal industry from EPA regulation, according to the AP. The non-binding resolution, which was introduced by Sen. Brandon Smith (R), is now before the House of Representatives.
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The Department of the Interior this week announced that its 2012-17 five-year plan for leasing tracts for offshore oil and gas exploration would place the Pacific, Atlantic, and eastern Gulf coasts off limits. In addition, Interior announced that the go-slow policy for Alaska offshore leasing would continue.
Secretary of the Interior Ken Salazar used BP’s Gulf oil leak as justification for reversing the policy that President Obama announced in March. Here is what CEI said in its press release responding to Interior’s announcement: “Obama Offshore Oil Moratorium Breaks Promise, Hurts Economy, Kills Jobs.” Tom Pyle of the Institute for Energy Research made similar comments. Even Senator Jeff Bingaman (D-NM), Chairman of the Energy and Natural Resources Committee, was critical.
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