Energy is inextricably linked to economic growth.
The effect of ever-creeping gas prices trickle down along the supply chain, from the suppliers to the manufacturers to the retailers — and ultimately — to the customer, who pays more for the final product. Nevertheless, President Obama has pushed forward with an anti-energy, anti-growth policy: no further oil exploration and drilling, a plethora of higher energy taxes, and new onerous carbon emission regulations.
It’s clear the president is attempting to artificially inflate the price of fossil fuels to force America to adopt his vision of a “green” economy. And if he gets his way, our sputtering economy will continue to shed jobs and face a prolonged downturn.
For the first time in two years, oil costs more than $100 a barrel. In the last month alone, gasoline prices have risen nearly 40 cents per gallon, bringing the national average for a gallon of self-serve, regular gasoline to $3.55, according to AAA. Prices are already topping $4.00 in some areas. And with the summer driving season fast approaching, prices at the pump are only going to climb higher.
While some of the blame can be placed on worldwide occurrences outside of Obama’s hands — oil supply disruptions in the Middle East and increased demand from an improving global economy — the president’s current de facto moratorium on drilling is merely making matters worse, further decreasing the energy supply.
Since the official moratorium was lifted in October, Obama’s Interior Department has slowly approved permits to allow drilling for only four rigs in the Gulf of Mexico. Only one is a new permit — the other three are renewal permits for rigs that were already conducting activities before the Deepwater Horizon accident last April. Over twenty deepwater drilling permits are still pending.
This de facto oil production shutdown has done nothing to address the root causes of last year’s accident, nor to aid in the economic rehabilitation of the Gulf region. Rather, it has resulted in billions of lost economic activity and job opportunities in the Gulf, according to the Institute of Energy Research.
Even greater opportunities exist in other areas of the country. The Congressional Research Service has shown that there is likely 164.1 billion barrels of untapped oil in the U.S., and that doesn’t include oil shale, which has recoverable reserves of 1 trillion barrels, according to DOE.
Obama’s response: hands off.
Meanwhile, he is traveling south of the border to tell Brazil that the U.S. will help develop its offshore resources so we can one day import its oil. “We want to help you with the technology and support to develop these oil reserves safely,” he told Brazilians. “And when you’re ready to start selling, we want to be one of your best customers.” Instead of encouraging domestic production and job creation at home, the president would rather create jobs for Brazilian workers, leaving Americans unemployed in the face of skyrocketing energy prices.
Tack on hundreds of billions of dollars in proposed energy taxes and new carbon regulations, and economic conditions will only worsen.
In a study conducted for the Institute for Energy Research, economist Dr. Joseph R. Mason found that Obama’s plan to repeal the Section 199 tax deduction would result in initial losses of “over 154,000 jobs by the end of 2011, not only in the energy sector but across the whole economy; more than $341 billion in lost U.S. economic output; and in excess of $68 billion in lost wages nationwide” over the next ten years. The study only analyzes the effects of one component of Obama’s energy tax plan. Imagine the economic impact of implementing all of the proposed taxes.
President Obama’s regulatory push is especially egregious considering that he is moving to bypass Congress and implement his failed attempt at cap and trade. By manipulating the 1970 Clean Air Act, Obama is effectively imposing new laws without congressional approval.
Once phased in, the EPA rules would regulate almost every aspect of American life: schools, hospitals, churches, and even large single-family homes. All would be subject to federal permitting requirements and regulations. The agency would also mandate complete redesigns and operational changes to everything from cars, trucks and tractors to airplanes, trains and even lawn mowers.
President Obama’s anti-energy proposals are preventing the market from working its magic to bring more affordable, efficient energy to Americans. The high price of oil is signaling energy producers to find and harness reserves. Obama’s plan to force the U.S. into the “green” economy is thwarting this process — all at the expense of American jobs and wallets.
Joseph E. Moser is a development associate at Americans for Prosperity Foundation in Arlington, VA.