Obama's misguided energy policy02/24/12
Despite his recent spin about presiding over an increase in domestic production, since the beginning of his Administration, President Obama has worked to sabotage American energy development. As a result of restricting access to domestic resources and implementing restrictive regulations which hike energy costs, American families are suffering.
With gasoline near $4 per gallon around the country, the President is under increasing political pressure from the left to release oil from the Strategic Petroleum Reserve (SPR). However, lowering gas prices requires a sensible, long term solution, not a one-time short-term fix. Dumping our emergency reserve into the market with a moment’s notice will only make a bad situation worse.
Tapping the SPR in this environment won’t have a meaningful impact on gasoline prices. Last summer, when President Obama released oil from the SPR, prices rose again the next week. A one-time infusion won’t fool OPEC nations into believing that America can manage world oil prices. A unilateral draw on our own reserve would do little to affect world price because other producing nations, especially OPEC, would simply reduce production to offset our meager addition.
It won’t intimidate Wall Street investors betting long on crude oil either. The financial and energy industries understand the simple fact that unless production outstrips demand, world prices will continue to rise. Speculators know that President Obama opposes increasing domestic production, and they are convinced the Iranians will disrupt the passage of oil tankers through the Strait of Hormuz. It should be clear to all that this is a toxic scenario - but tapping our emergency supply of oil will not fix the problem.
The SPR should never be used to score political points. It is an important part of our nation’s energy security which should only be used in times of actual shortage, like the 1972-‘73 oil embargo, when our refineries went offline as OPEC squeezed off exports. The SPR was created to respond to this specific problem, not to provide a political reprieve from high gasoline prices. Releasing oil from the SPR into the market is only effective when there is plenty of spare refinery capacity. That’s not the situation today. There is no physical shortage of oil flowing into American refineries.
A better solution to relieve the pain Americans are feeling at the pump begins with a balanced approach to energy policy. Our country faces significant challenges, but if President Obama can abandon the “Solyndra Economy” and adopt a pro-growth and solutions-based approach, our country will be set on a strong path forward. The President’s insistence on creating “green jobs” illuminates the pitfalls associated with relying on the government to supply affordable energy. The proper role of government is to foster an environment where the private sector can invest with certainty, which creates a strong economy and ensures reliable, affordable energy.
We should focus on reducing government overreach and removing the barriers that stand in the way of innovation. The only way we can really influence how OPEC sets prices is by limiting our reliance on their oil. We know the resources are available in our own backyard and can be safely accessed. The President has been touring the country touting the incredible success we’ve had drilling on state and private lands, especially in Texas and North Dakota. It’s time for his agencies to step aside and allow the investment and job creation that would come with drilling on federal lands.
The President should overhaul his energy policy. A commitment to secure, affordable, domestic oil and gas would send a message to OPEC nations that we can reduce imports long term. The private sector can solve the problem - if government is made to understand its proper role. We should expedite the targeted, responsible development of domestic oil and gas in the Alaska National Wildlife Refuge and offshore in the Gulf of Mexico. Opening federal lands to safe and responsible shale oil and gas, and approving the Keystone XL pipeline would also send a clear message to the world that the U.S. has its own energy resources.
The House has passed several bills to achieve a strong domestic energy policy that will provide a stable, affordable energy supply, create hundreds of thousands of American jobs, strengthen our national security and bring billions of new revenue into the federal government. The President should encourage Democrats in the Senate to pass these bills before he blows through our strategic reserve of petroleum.