American Elephants


President Obama’s Energy Agenda is a Fraud. by The Elephant's Child

The White House has released what they call “an infographic” entitled “The Obama Energy Agenda & Gas Prices” that highlights a number of facts with regards to domestic oil production, improved fuel efficiency, improved transportation fleet and a clean energy future.

In other words, they have issued a summary of what they want you to believe, omitting critical facts that might reveal that this Administration is choking off oil production and trying to use taxpayer money to force uncompetitive energy sources and technologies into the marketplace.

Obama’s own estimates of the potential of wind and solar energy seem to be realms of fantasy.  Exactly what he believes and why, we don’t know. Is this payback to the Environmental Groups who have been big supporters, or does he believe that his vision of a clean, green economy is possible? Even George Monbiot realizes that the solutions that environmentalists propose are unworkable.

Obama’s infographic emphasizes that U.S. crude oil production in 2010 was the highest it has been since 2003.  The Administration offered over 6 million acres onshore and 37 million acres offshore for lease. 

But production in the western Gulf of Mexico has dropped by nearly a third since last April, and the increased production in 2010 is due to more horizontal drilling in North Dakota.  The Pacific Coast, Atlantic Coast, the eastern Gulf of Mexico and the Alaskan Coast have been put out of reach for drillers by executive order.  The U.S. Environmental Appeals Board has withheld air-quality permits to keep Shell Oil from moving forward to develop 27 billion barrels of oil of the northern coast of Alaska.

The Administration’s Energy Information Administration projects that  oil production will decline significantly in 2011 and 2012. The Administration focuses on improved fuel efficiency and thinks that just demanding a 35.5 mpg standard for model years 2012-2015 will save consumers money and reduce oil use. They believe that American consumers and manufacturers are not interested in saving money and that it is government’s role to fix that.

But although the administration estimates a higher sticker price for cars, experts think those estimates are too low.  There are many reasons why people buy different types of cars, and for many fuel efficiency is trumped by safety or utility, or simply size.  The government has no ability to predict what consumers want.  The change in consumer buying preferences will not be enough to meet the 35.5 mpg standard.

Then the picture turns to the Administration’s efforts in promoting electric vehicles, cleaner buses, and increased biofuel production.

But these technologies all rely on government subsidies, tax rebates, loan guarantees and production tax credits.  If these technologies work, the profit motive should provide enough incentive for development. Value to the consumer does not exceed the cost.  It is a bad deal for consumers and taxpayers. The government is distorting the marketplace, and crowding out the investment that might have gone to  good ideas.

Obama’s final fragment of his chart extols his desire to eliminate “tax breaks” for the oil and gas industry and use that money to “invest” in clean energy, to meet his goal of 80% clean energy by 2035.

But these so-called “tax breaks” are not specific to the oil and gas industry. Every business is able to depreciate their capital investments in new equipment or materials essential to their business that have a finite life. In the case of oil and gas companies they are called by names like “depletion allowances”, but they are  still depreciation, and not subsidies.  The Administration is misleading.  A “clean energy standard” would mandate the production of more costly electricity, which would inadvertently make electric cares more expensive yet. This is cap-and-trade hiding behind prettier words.

80% clean energy is not going to happen. Wind is too intermittent, Solar is too diffuse. All this is due to the illusion that carbon dioxide, one of the building blocks of life, is a “pollutant” and the cause of disastrous increases in global climate temperatures. It is not.

Obama’s Energy Agenda  and attempt to avoid getting blamed for high gas prices is a fraud on the economy and the people of America.




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