Americans are paying more for gasoline today than they were six weeks ago when President Obama released 30 million barrels of oil from the Strategic Petroleum Reserve. In the Gulf of Mexico, meanwhile, 10 drilling rigs — more than one-third of the fleet — have left on Obama’s watch.
This incomprehensible energy policy is not only costing Americans more money at the pump. Bureaucratic delays in Washington are also stunting job growth and adding to the budget deficit.
As the Obama Administration pivots to a new jobs agenda — at least its seventh attempt to do so — it would be wise to review the policies that are slowing energy production. Thirty-four years to the day President Jimmy Carter created the Energy Department, it’s time for America to embrace a pro-energy agenda that boosts the economy, increases federal revenue and creates jobs.
The most glaring example of Obama’s mismanagement is the decision to tap the Strategic Petroleum Reserve on June 23. Heritage experts James Jay Carafano and Nick Loris outlined the limited circumstances under which the White House could release oil. None of these conditions were met in June, and the Administration itself backpedaled when questioned about the timing.
And what did it accomplish? Aside from diminishing a vital national security asset, it didn’t reduce the price of gas. Americans were paying an average of $3.61 for regular unleaded on June 23, according to AAA. Today the average is $3.70.
Six weeks later, it’s increasingly apparent that Obama took the action to bolster his dismal poll numbers, hurt by the sluggish economy and rising gas prices.
If the President was serious about bringing down the cost of gas, he would instruct his Administration to reduce the bureaucratic red tape on energy projects in the Gulf of Mexico. A new report from Greater New Orleans Inc. revealed that the issuance of drilling permits is down 71 percent compared to the monthly average over the past three years.
The decline isn’t for a lack of interest from energy producers. Two weeks ago the respected IHS Cambridge Energy Research Associates and IHS Global Insight revealed the potential for production if government simply approved the drilling permits.
The implications are staggering. Next year alone, additional production from deepwater wells could generate 411,000 barrels per day or 150 million barrels for the year. That’s five times the amount that Obama released from the Strategic Petroleum Reserve.
That additional oil would ease the pain on consumers’ wallets and reduce America’s dependence on foreign oil — a matter that’s even more pressing in light of OPEC’s new leader, Rostam Qasemi, an Iranian Revolutionary Guard commander under U.S. and European Union sanctions.
Then there’s the impact on federal, state and local governments. At a time when many are facing budget deficits, the money generated from royalty payments and taxes would add an extra $12 billion in revenue next year.
The biggest upside might be the number of jobs created from the additional production. Those jobs aren’t just in Louisiana and Texas, either. They’re spread out across America, according the study. A total of nearly 230,000 new jobs — an amount that exceeds the size of General Motors — is forecast for 2012 if the pace of offshore energy development and permitting increases.
As things currently stand, however, those jobs are a figment of Obama’s imagination. Worse still is the news that the Department of the Interior might let hundreds of Gulf of Mexico drilling leases expire, costing jobs and further decreasing production.
“In 2011 alone, more than 300 offshore leases in the Gulf of Mexico are due to expire,” Senator David Vitter (R-LA) announced yesterday. “If these leases are allowed to expire, they will revert to the federal government, killing jobs and cutting off potential revenue from exploration and production.”
Vitter is vowing to block the nomination of Rebecca Wodder to serve as an Assistant Secretary in the Interior Department unless the Administration issues a blanket extension of the leases due to expire this year. The Administration would prefer to make a case-by-case decision on the leases–an unnecessary bureaucratic hurdle, according to Vitter.
How will it end? By threatening to delay another Administration nominee, Vitter was able to speed the approval of drilling plans. He also blocked a nearly $20,000 pay raise for Interior Secretary Ken Salazar. More must be done.
The long-term implications are devastating otherwise. New exploration, which impacts oil supply in seven to 10 years, isn’t happening at a pace to keep up with demand.
Americans, meanwhile, bear the brunt of the Obama Administration’s misguided decisions.