http:\/\/www.foreignpolicy.com\/articles\/2012\/03\/01\/the_driller_in_chief
\nMICHAEL LEVI
\nForeign Policy
\nMARCH 1, 2012 (many weblinks in original)<\/p>\n
It was a strange scene even by the standards of an odd primary season.
\nRick Santorum, fresh off a narrow loss in Michigan, started waving about a
\nhunk of jet-black rock during his concession speech on Tuesday night, Feb
\n28. “Yeah, this is oil,” he explained. “Oil. Out of rock. Shale.” But not
\nunder this American president. Like his fellow candidates for the
\nRepublican presidential nomination, as well as most of the fossil fuel
\nindustry, Santorum is convinced that Barack Obama is out to kill oil and
\nnatural gas. “We have a president who says no,” he warned. “We need a
\npresident who says yes to the American people and energy production!”<\/p>\n
It’s a potent line in a country where many assume that Democrats despise
\noil and gas. Their instinct is sometimes right: There are large segments
\nof the party that have never encountered a fossil fuel development that
\nthey liked. But Obama doesn’t fit that mold. Indeed there is a strong case
\nto be made that he, not his opponents, offers the best hope for American
\noil and gas.<\/p>\n
Let’s start with the statistics. After falling every year from 1991
\nthrough 2008, U.S. oil production has climbed for three years in a row.
\nU.S. oil imports started to drop in 2005 under President George W. Bush,
\nbut Obama’s policies haven’t stopped the trend. Last March, Obama
\nannounced a target of cutting oil imports by a third by 2020; less than a
\nyear later, the United States is already more than halfway there. Natural
\ngas production is also surging. The United States hit rock bottom in 2006,
\nat which point the shale gas revolution began to re-energize the sector.
\nThat boom has continued since Obama took office. It’s tough, in other
\nwords, to square claims that Obama is destroying American oil and gas with
\nthe record production numbers that the industry is posting year after
\nyear.<\/p>\n
Statistics, of course, can be misleading. Most of the groundwork for
\nwhat’s happening now was laid before Obama took office — and markets, not
\npolicymakers, can take most of the credit for the oil and gas sector’s
\nstrong performance. Critics will argue that because the energy business
\nmoves slowly, many of the biggest consequences of the president’s policies
\nhave yet to be felt. What might surprise them, though, is that this is
\nwhere Obama could have the best story to tell.<\/p>\n
Take the battle over fracking, a controversial technique used to unlock
\nmassive deposits of oil and natural gas in underground rock formations
\nthat has come from nowhere to become one of the most critical features of
\nthe U.S. energy scene. Santorum and his acolytes are convinced that tough
\nregulation will kill this key driver of the U.S. energy boom. But if the
\nDeepwater Horizon oil spill in the Gulf of Mexico taught us one lesson,
\nit’s that lax regulation — in enabling industry mistakes to gut public
\nsupport and confidence — can be far more damaging. A spate of dumb and
\npreventable accidents by poorly regulated shale developers would do far
\nmore to set back U.S. oil and gas development than some smart minimum
\nstandards set out at the federal level.<\/p>\n
This White House has signaled that it prefers precisely such an approach,
\nthough precise details haven’t yet been forthcoming. Undoubtedly, some in
\nthe administration would like to see a dominant role for the federal
\ngovernment and regulations that could hit the industry harder than is
\nneeded. So far, however, they appear to be losing. Last year, Obama had
\nhis energy secretary appoint a group of industry experts and environmental
\nauthorities to advise him on shale. The team, which included prominent
\nshale enthusiasts like Daniel Yergin and John Deutch, produced a string of
\nrecommendations that were widely seen as constructive rather than
\nadversarial. Fuel Fix, a news service run by the Houston Chronicle,
\ndescribed them as an “olive branch to industry.”<\/p>\n
The Obama administration has a particularly strong case to make when it
\ncomes to natural gas. Smart developers aren’t crying because Obama has put
\ntoo much gas out of reach — they’re terrified because production is so
\nstrong that collapsing prices have crushed their bottom lines. The best
\nway out of this situation is to find new uses for natural gas. Although
\nmarkets will play a critical role in this endeavor, the most powerful
\napproach is to get government involved. For those who believe in the
\nurgency of fighting climate change, the right step is obvious: Adopt
\npolicies that replace coal-fired power with natural gas, which would slash
\ncarbon emissions and clean up the air at the same time.<\/p>\n
Indeed, the worst political news for the gas industry in the last few
\nyears should have been the collapse of a signature Obama initiative: cap
\nand trade. A modest cap-and-trade program would have increased the price
\nof coal relative to that of natural gas and encouraged utilities to switch
\nto the cleaner-burning fuel, just as it has in Europe. The best hope for
\nboosting gas demand going forward is some variation on that theme, be it
\nClean Air Act rules that favor gas over coal or a clean energy standard
\nthat creates preferences for cleaner fuels, including gas. Both are
\npolicies that Obama has championed — and that his adversaries have
\nopposed.<\/p>\n
None of this is to suggest that Obama’s record on energy is without
\nblemish. His delay last November of the Keystone XL pipeline sent an
\nunfortunate signal to developers and markets that the administration was
\nwilling to waver on oil development when politically pressed to the wall.
\nThe administration’s insistence that developers quickly drill on their
\nleases — known as “use it or lose it” provisions — is difficult to
\nsquare with how development works best. There is also a legitimate debate
\nto be had about whether more federal lands might prudently be opened to
\nenergy production. In particular, though the Gulf of Mexico oil spill was
\ngood reason to take a fresh look at offshore drilling, Obama should
\nprobably have pressed forward with his March 2010 plan to open more waters
\nto production rather than reversed course.<\/p>\n
But most of the other criticisms from administration opponents fall flat.
\nThe White House, for example, has been called out for railing against oil
\nand gas industry tax subsidies. But with the exception of the “intangible
\ndrilling costs” deduction, which can help smaller and more nimble oil and
\ngas companies with their cash flow, these benefits are largely without
\nmerit; instead, they simply transfer money from taxpayers to producers’
\nbottom lines. Obama has been attacked for slow-rolling offshore drilling
\npermits in the wake of the Gulf of Mexico disaster, but the alternative
\ncould have allowed unsafe projects to proceed — and another spill would
\nhave been devastating for the environment and development alike.<\/p>\n
While Obama’s opponents continue to attack him for his supposedly
\nanti-development policies, one group seems to have figured him out. When
\nTransCanada announced on Feb. 27 that it would go ahead with a segment of
\nthe Keystone XL pipeline and the White House embraced it, the response
\nfrom a leading environmental organization was far from supportive:
\n“Splitting the project means double the trouble,” the Natural Resources
\nDefense Council declared, en route to savaging those who would disagree.
\nWhen the president spoke up in favor of a smart approach to oil and gas in
\nlate February, Joe Romm, a prominent climate blogger at the Center for
\nAmerican Progress, responded with a biting headline: “‘All of the Above’:
\nObama Names His Failed Presidency.”<\/p>\n
The attacks from the right and the left must make for a lonely White House
\n— and that should make those people who genuinely desire prudent energy
\ndevelopment worried. Instead of attacking Obama for sins not committed or
\nfixating on the handful of places where they differ from him, they should
\nlend support to the president’s surprisingly constructive policies. Both
\nthe hands-off alternative that his opponents advocate and the (at best)
\nambivalent approach that many of his erstwhile allies prefer could be far
\nworse.
\n– Michael Levi is senior fellow for energy and the environment at the
\nCouncil on Foreign Relations. He blogs regularly at Energy, Security, and
\nClimate.<\/p>\n
http:\/\/www.foreignpolicy.com\/articles\/2012\/03\/01\/the_driller_in_chief<\/p>\n
Special thanks to Richard Charter<\/p>\n","protected":false},"excerpt":{"rendered":"
http:\/\/www.foreignpolicy.com\/articles\/2012\/03\/01\/the_driller_in_chief MICHAEL LEVI Foreign Policy MARCH 1, 2012 (many weblinks in original) It was a strange scene even by the standards of an odd primary season. Rick Santorum, fresh off a narrow loss in Michigan, started waving about a hunk of jet-black rock during his concession speech on Tuesday night, Feb 28. “Yeah, this is … Continue reading Foreign Policy: The Driller in Chief: President Obama’s critics say he’s been a disaster for the energy industry. But the numbers tell a different story.<\/span>