President Obama laid out his vision for the nation’s energy future in his State of the Union address this year and not surprisingly, the plan was incongruous with his actions. While he continues to take credit for America’s dwindling dependence on foreign oil and our increase in domestic natural gas production, the reality is that the Obama administration has an abysmal record of attempting to stymie production and limit the manufacturing of finished petroleum products and petrochemicals by erecting executive and regulatory roadblocks.
The biggest impediment toward reaching the White House’s stated goal of energy independence is its own unrealistic limitations and conditions on developing and manufacturing the energy resources that our nation needs. This reality should concern every American.
Despite the president’s policy of obstructionism, the United States last year produced more oil than it imported for the first time in nearly two decades. Yet increases in both oil and natural gas production are solely due to development on state and private lands, and that’s unlikely to change because the president says that federal lands will continue to be off limits. Too bad, because according to the Institute for Energy Research, access to federal lands could add $127 billion in gross domestic product for just the next seven years alone. And it would also boost federal tax revenue by $24 billion over that same time period, an enticing figure amidst growing concerns over the debt ceiling.
If the president truly believes in an “all of the above” energy strategy, he would lift the ban on developing federal lands, on-shore and off, and streamline the permitting process for construction projects, which would add jobs to the U.S. economy in far greater numbers than those promised by alternative energy sources. And if “all of the above” isn’t just political rhetoric, the president would take the next step by approving the Keystone XL pipeline, which would add to our critical infrastructure needs and further the goal of North American energy independence.
The president’s roadblocks aren’t just limited to the production of oil and natural gas; he also has targeted the production of finished petroleum goods and petrochemicals. While the president talks about developing “shale manufacturing zones,” under current and proposed regulations, it’s all wishful thinking. American manufacturing is held hostage by federal regulations and policies that are ostensibly designed to address climate but will actually hurt the environment and harm our progress in manufacturing.
For example, the United States has been a leader in reducing greenhouse gases and other emissions over the last 12 years. Our air is cleaner than it has been in more than 20 years, and yet, the Environmental Protection Agency’s proposed ozone national ambient air quality standards (NAAQS) are so strict that many of our national parks would violate them. If approved, NAAQS could cost 7.2 million domestic jobs and decrease our economic productivity by $1.6 trillion, as well as bring our nation’s energy renaissance to a halt. And to what end? Any approach to reduce global greenhouse gases and other pollutants cannot be addressed with unilateral measures. There must be international cooperation.
If the president is truly concerned about the environment he should take a closer look at the Renewable Fuel Standards (RFS), which according to EPA’s own data will actually increase greenhouse gas emissions compared to gasoline because the law induces farmers at home and abroad to plow new land. Moreover, data from the National Academies of Science and the EPA show that the RFS is actually worsening air and water quality, calling into question the purported environmental underpinnings for the RFS and compounding compliance challenges with other environmental statutes. Counterproductive regulations tie the hands of fuel refiners and petrochemical manufacturers and limit our ability to compete internationally.
We would remind President Obama that this nation and others like it have been built because of fossil fuels; they are our past, our present and despite what others may wish, they are our future. Even now natural gas liquids (NGLs) harvested in the great shale revolution, are creating an affordable feedstock to make petrochemicals. Without petrochemicals modern day life wouldn’t look nearly so modern. Everyday products like the president’s cell phone and the teleprompter he used in his State of the Union address to marginalize the oil and natural gas industries’ contributions to the economy, all depend on petrochemicals. Affordable natural gas as an energy source, and NGLs as a feedstock, are drawing the attention of manufacturers who had moved their production overseas. Nothing will shut down those prospects of re-shoring manufacturing jobs faster than onerous and costly regulations.
We share President Obama’s goals of increasing our energy production, adding jobs and building our economy, and yet those ambitions are at odds with his administration’s policies. With a little more than two years left in office, it’s not too late for the president to rewrite his energy legacy.
Charles T. Drevna is the president of American Fuel and Petrochemical Manufacturers.