Sunday, April 10, 2011

The wayward path to energy independence

By Kelly Sloan
In an effort to seek relief from the chore of deciding on his next 6- to 12-hour Middle East strategy, President Obama last week made a speech on energy policy. It was actually refreshing to remember that there were some issues where the president is both wrong AND consistent.

To be fair, though, some things in his speech were perfectly accurate. The need to reduce foreign oil imports, for instance. Also, that we do that by producing more domestically while reducing the consumption, or changing the source, of fuel. These epiphanies, mind you, are on the order of saying that daytime is brighter than night, or that liberals have trouble with math.

But it was not long after the welcome acknowledgement that America sits atop valuable resources and maybe ought to develop them, that the usual confusions began to surface.

The president spoke of “American ingenuity” as being what was going to solve the energy problems. He is absolutely right. Which made it somewhat disappointing, if hardly surprising, that pretty much the rest of the speech was instead all about government.

He started with, for instance, the myth of idle leases — to paraphrase: “we (the government) approved such and such number of permits. Some of the leases do not have drilling rigs on them. Hey, I did all I can do…” As though issuing permits was the goal of American energy policy.

Issuing a permit is just one step in a labyrinthine process that can take years to complete, should the bureaucrats (many of whose sole purpose in life is to prevent a drill bit from coming anywhere close to blemishing the face of sweet mother earth) allow it to actually happen. State regulations, as we are all too aware, play a role as well. Some states, like North Dakota, do a pretty reasonable job. Others, like Colorado, just send the jobs to North Dakota.

On the issue of domestic oil production, particularly in the Gulf of Mexico and Alaska, a modicum of defensiveness could be detected in the speech. And who can blame him? After all, it was the president and his crew who authorized the ill-considered, knee-jerk moratorium on drilling in the Gulf, which, among other things, had the effect of slamming the door on the few re-emerging energy jobs just beginning to materialize throughout the rest of the nation, as energy companies sought to preserve their off-shore experience by dispersing their Gulf employees from sea to shining sea.

As the President turned to natural gas the speech took on an arrogant tone, as Obama declared that the government needs to improve the safety of the industry. Based on what? The hundreds of natural gas disasters over the last decade that have not happened? Or perhaps the fantasy that reservoir-fracturing poisons water wells like a hydraulic Lucrezia Borgia? More evidence exists of the Loch Ness Monster, than does to support the claim that fracturing harms the water supply.

The president then spent the next several minutes talking of the need for innovations in energy, clean technologies and the like, but then advocated going about it in the least efficient manner possible — through government trying to direct the private sector.

The idea that government control will help drive innovation is as discredited as the use of bloodletting to cure a fever, and yet Obama seems to think that American engineers, scientists, entrepreneurs and investors will just mill around with confused looks on their faces until someone from the government arrives on the scene to get things going.

Finally, he brought out the economic euphemism de jour, investment, as he implored for further investment in new energy. The federal government does not have the money left to buy a happy meal, and yet Obama is gung ho to spend more money on something that the private sector can, should, and (if left alone) will do — more efficiently to boot.

Obama bragged about certain alternative energy projects that would not have happened without government support. He is right. Without taxpayer-fed subsidies, many inefficient and economically unviable “green: projects would go the way of the Edsel and New Coke.

All that said, the call to increase domestic oil and gas production is welcome, provided the president intends on following through and actually lifts some barriers to production. But what he most expressed was a fundamental distrust of the free market, and by extension, the American people. This, more than anything, is what will hold back American energy independence.

This article first appeared in the Grand Junction Free Press on April 8, 2011. Reprinted with permission.

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