Friday, April 01, 2011

Obama Delivers Energy Speech at Georgetown

President Obama went to Georgetown University to deliver a speech on energy.

From the American Petroleum Institute:
2011 may be the first year without a Gulf lease sale since 1963 and the first year with no federal offshore lease sale since 1957. The revenue impacts are significant, considering that offshore lease sales often bring billions into the federal treasury on an annual basis.

This is important because of the lag time involved in energy - specifically oil and gas - production. The "increase" Obama currently claims credit for in production is the result of drilling decisions from several years (and a different administration) ago.

This is a chart that clearly shows a continuing timeline on how this administration has handled the decisions necessary for drilling for oil and gas, both onshore and offshore. apiinfographic

From Obama's speech at Georgetown University:

Now, here’s the thing -– we have been down this road before. Remember, it was just three years ago that gas prices topped $4 a gallon. I remember because I was in the middle of a presidential campaign. Working folks certainly remember because it hit a lot of people pretty hard. And because we were at the height of political season, you had all kinds of slogans and gimmicks and outraged politicians -- they were waving their three-point plans for $2 a gallon gas. You remember that -- “drill, baby, drill”
-- and we were going through all that. (Laughter.) And none of it was really going to do anything to solve the problem. There was a lot of hue and cry, a lot of fulminating and hand-wringing, but nothing actually happened. Imagine that in Washington. (Laughter.)

The truth is, none of these gimmicks, none of these slogans made a bit of difference. When gas prices finally did fall, it was mostly because the global recession had led to less demand for oil. Companies were producing less; the demand for petroleum went down; prices went down. Now that the economy is recovering, demand is back up. Add the turmoil in the Middle East, and it’s not surprising that oil prices are higher. And every time the price of a barrel of oil on the world market rises by $10, a gallon of gas goes up by about 25 cents.

That's the problem - production of oil and natural gas is a political decision for Team Obama, not a national security decision or a supply and demand decision. Remember, Energy Secretary Chu sang the praises of $10 a gallon oil at the gas pump so that his preference - nuclear energy - would be more widespread in America.

And, a bit of irony with the President of all people referring to slogans and calls of "drill, baby, drill" as gimmicks. This was the man who ran on empty slogans. Who doesn't remember "hope and change" and "we are the change we have been waiting for" and so on?

Obama - Mr. Change - delivered the same energy speech that has been delivered for decades by politicians on both sides of the political aisle. Though Obama is still fond of kicking former President Bush, it was George W. Bush who pushed for development for green energy, besides traditional oil and gas production. Obama conveniently ignores the new tech batteries, for instance, that Bush encouraged in big speeches on energy that would work in electric cars. He called for incentives for development of wind and solar energy, too.

Decisions made today reap results in the years to come. With this administration's ban on continuing to develop oil and natural gas production, it does not bode well for our independence from foreign sources in the future. Green energy is fine but it is decades away for any real impact and we still need all methods of production for the near future.

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