Published January 04, 2011
President Obama has rededicated himself to creating jobs this year, but rapidly increasing prices for oil and gasoline threaten that goal. And many argue the president's policies are making things worse.
One former oil man warned then-candidate Obama back in 2007.
"I said, Senator, if you don't do something in your first term, if you’re successful, to increase hydrocarbon production in this country you will be on your knees in 2012," said John Hofmeister, former president of Shell Oil.
But Hofmeister says the administration has punted on domestic production. Instead of expanding it, the oil industry says the administration has roped off some 85 percent of the outer continental shelf, leaving the industry few places to go.
The president of the American Petroleum Institute, Jack Gerard, argues that "if we open areas that are currently off limits to development, we could create more than 500,000 jobs throughout the economy, and generate an additional $150 billion in government revenue by 2025."
There is one inescapable fact. The U.S. now uses about 20 million barrels of oil a day but produces only 7 million. Hofmeister argues that bolstering that sum to 10 million barrels per day of domestic production would help hold down the price of oil.
"We'd be talking about trillions of dollars of investment if we were moving to 3 million more barrels a day of production,” Hofmeister said.
That could mean millions of jobs created and saved in the oil industry, as well as those that rely on oil, such as trucking, plastics and manufactured products of all kinds.
"Every sector of the economy depends on affordable energy -- every business owner, every worker, every household and family member, and every consumer depends on affordable, reliable supplies of oil and natural gas," Gerard said.
Global energy consumption is predicted to grow by 50 percent in the next 25 years, which will keep prices rising unless supply increases.
But Democratic analysts argue no additional offshore drilling is needed.
"We don't need it to produce more. Certainly it's good we have some domestic production. We don't need it to be doing more."
Many say they don’t want more drilling because they want the U.S. to move away from oil and rely instead on alternatives such as wind and solar.
"That points back to bringing demand down so that we are not dependent on oil," Gordon said.
But whatever happens with alternatives will not reduce oil consumption for years to come. And without more production, some predict consumers could see $5 per gallon gasoline at the pump by the end of 2012.
"And that's when we vote on who will be our future president," Hofmeister noted.
The prospect of consumers battered by high gasoline prices, and the economy struggling under the weight of expensive energy going into a presidential election year qualifies as a nightmare for Obama and may be something rolling around in the back of the president's mind as he considers what his energy policy should be over the next two years.