Just prior to the mid-term elections, President Obama ended the drilling moratorium in the Gulf of Mexico, at long last heeding an outcry that included members of his own party. However, the gesture was purely political, and as it turns out, deceptive. Behind the scenes, his regulators imposed new red tape so complex that a de facto “permitorium” effectively kept the ban in place.
The result was permanent job losses, even as it came to light that the Interior Department doctored scientific reports to enforce what turned out to be an unnecessary shutdown of Gulf energy exploration in the first place. The oil and gas industry supported $12.7 billion in household earnings in Louisiana alone, according to state data, and a study by LSU Professor Joseph Mason found that the ban cost up to 155,000 jobs. The impact extended to the region’s small businesses from suppliers to grocery stores relying on revenue from the oil and gas industry.
On December 1, the president finally gave up the charade and declared that no drilling will take place in the Eastern Gulf of Mexico for the next five years. He even upped the ante, adding the Pacific and Atlantic Coasts to the no-drill zones.
Evidently, neither jobs nor the nation’s energy security are important considerations for this president.
Clearly, his calculus is governed by politics and power. With approval ratings hovering in the low 40s since August, Obama could face a potential primary challenge in 2012.
Conventional wisdom holds that any credible Democratic challenger would have to run to the left of Obama to capture the nomination. The predicament is that on most policy issues, including taxes, the economy, and the deficit, he has governed too far to the left and is being forced to change course. The environment is one area remaining in which Obama can appeal to a large base of liberal voters.
While the president gave lip service to developing natural gas contained within shale immediately following the mid-term elections, his EPA issued new rules requiring natural gas companies to measure and report greenhouse gas emissions. The measure is only the first of several being weighed that will impose a regulatory cost burden ultimately shouldered by consumers.
These are popular moves with the environmental lobby, whose agenda includes pushing energy prices so high that the “free” market would be forced to concentrate on renewable energy production including windmills, solar and ethanol, all of which are woefully inefficient and would drastically drive up consumer energy prices.
As evidence of this strategy, consider the recent wholesale price index, which indicated rising manufacturing costs almost across the board due to rising oil costs. Oil prices have already returned to their pre-recession levels, unfortunately, employment numbers haven’t followed suit.
A better solution for the president to inoculate himself from a primary challenge and ultimately win re-election would be to concentrate on promoting more jobs and a better economy. Unfortunately he doesn’t understand that if America exports energy production to other countries, we can have neither.
Thomas J. Pyle is President and CEO of the American Energy Alliance.