Filed under: Capitalism, Democrat Corruption, Economy, Energy | Tags: Chevron, Misguided Energy Policy, Obama Administration
The aim of our current energy policy is greater efficiency and development of new energy technologies to reduce our dependence on oil imported from unstable or unreliable regions, and to reduce emissions of greenhouse gasses, more than 80% of which are associated with the production and consumption of energy. That almost sounds like a real policy.
The effect of this is to replace low cost energy with high cost energy, while attempting to maximize employment instead of minimizing the cost of employment. There’s a difference.
So far there has been a significant reduction in imported oil, but it is due to a weak economy and high unemployment rather than to any improvement in vehicle fuel economy. Reduction in greenhouse gases is unrelated to wind power or to light replacement, but due to the recession and the increase in natural gas from shale deposits.
American energy policy has traditionally promoted cheap and abundant energy to sustain economic growth. An energy policy that relies on economic weakness is not in our national interest. We are focusing all of our effort on solutions that are small scale and high cost.
Obama has recently acknowledged that oil and gas remain the fuels of the future — though he may not mean it. In order to reassure Americans concerned about the price of gas at the pump when some are warning of $5 a gallon gas this summer, Mr. Obama has resorted to his old standby of calling for a one-third reduction in U.S. oil imports by 2025. He believes in setting definite goals. It sounds impressive although it is meaningless, and distorts the market. We used to call this “central planning”
The only conceivable way to meet that goal is by dramatically increasing U.S. oil production — immediately, said John Watson, the CEO of Chevron, in an interview with the Wall Street Journal’s Kim Strassel. The argument that we are running out of oil is popular with greens and Democrats, but, says Mr. Watson, largely irrelevant. We have been running out of oil for a very long time, but technology keeps creating new opportunities. Over the past 30 years, as “peak oil” was a nearly constant theme, the world’s proven reserves of oil and natural gas increased 130% to 2.5 trillion barrels.
The world consumes 250 million barrels of energy equivalent today, only a “tiny fraction of which” is wind and solar—and even those “are not affordable at scale,” he says.
As for biofuels, “we would need to consume land the size of states” to hit the country’s current ethanol targets. Chevron is investigating biofuels, but Mr. Watson says the “economics aren’t there yet.” Unlike many CEO’s, says Strassel, Mr. Watson insists on products that can prosper without federal subsidies.
Obama’s endless moratorium on drilling has already meant that “if you go out to the middle of the decade, there are a” huge new regulatory burdens on industries that are import sensitive, putting their competitiveness at risk, and ultimately we’ll produce less gasoline here and end up importing it from refineries that are less energy efficient overseas.”
If we are serious about promoting recovery—we would be promoting abundant low-cost energy at a scale suitable for a $14 trillion economy for which employment gains in the energy industry didn’t come at the expense of productivity.
Over and over, the Obama administration claims to be creating jobs and working for an economic recovery; while with the other hand they issue regulations that work to the opposite effect—killing job opportunities, damaging industries—and extending the length of the recession. All that “investment” has gone to paying off his supporters, not to rescuing the economy. He knows how to do payback, it’s the recovery he doesn’t understand.
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