The Green Energy Rhetoric Continues
Religion & Liberty Online

The Green Energy Rhetoric Continues

Last week President Obama gave an address outlining his new energy policy. In light of the tragic events in Japan, the speech was much anticipated especially considering the president’s prior commitment to nuclear energy.

As expected President Obama continued advocating for a greener energy policy while continuing to push for the country’s independence from oil. However, the President’s speech, an article by Reuters points out, was “short on details on how to curb U.S. energy demand.”

Furthermore, the President’s call for a path towards greener energy and energy independence will not be easy. The New York Times appropriately states, “The path to that independence — or at least an end to dependence on the Mideast — could well be dirty, expensive and politically explosive.”

President Obama continues to voice his support for alternative fuels and green energy. He argued for energy from wind, solar, natural gas, biofuels, natural gas, and nuclear. However, as I have argued in the past, these alternative fuels have costly subsidies, unintended consequences, are not cost effective, and have proven to be largely inefficient (I address the unintended consequences of ethanol here, here, and here and the unintended consequences with wind turbines here).

The president is calling for more government regulation. He gave a glimpse of a new energy standard he is going to pursue this summer, “This summer, we’re going to propose the first-ever fuel efficiency standards for heavy-duty trucks. And this fall, we’ll announce the next round of fuel standards for cars that build on what we’ve already done” he said. In an economy that is looking to rebound from a recession, businesses do not need another costly government mandate forcing them to change their transportation fleet. Instead, the President should rely on the market. Businesses will upgrade their transportation fleet naturally through the market when it is efficient and more cost effective for them to utilize heavy-duty trucks that are more fuel efficient.

The president also stated that we need to look to other countries, such as Brazil, for oil. However, an article published by Real Clear Markets is very critical of the President’s pursuit of Brazilian oil:

Now, with a seven-year offshore drilling ban in effect off of both coasts, on Alaska’s continental shelf and in much of the Gulf of Mexico – and a de facto moratorium covering the rest – Obama tells the Brazilians:

“We want to help you with the technology and support to develop these oil reserves safely. And when you’re ready to start selling, we want to be one of your best customers.”

Obama wants to develop Brazilian offshore oil to help the Brazilian economy create jobs for Brazilian workers while Americans are left unemployed in the face of skyrocketing energy prices by an administration that despises fossil fuels as a threat to the environment and wants to increase our dependency on foreign oil.

Furthermore President Obama’s talk of expediting drilling permits is not wholly accurate. The Obama Administration has not been friendly to offshore domestic drilling since the BP disaster last year. As the above quoted article from Real Clear Markets explains, there has been a seven-year offshore drilling ban on Alaska’s continental shelf and in much of the Gulf of Mexico. That has not changed under the Obama Administration. The Heritage Foundation pointed out in February:

Putting aside calls from some who want to increase domestic exploration to areas in Alaska and elsewhere, President Obama has completely shut down the existing oil drilling infrastructure in the U.S. At least 103 permits are awaiting review by the Bureau of Ocean Energy Management, Regulation and Enforcement. The federal government has not approved a single new exploratory drilling plan in the Gulf of Mexico since Obama “lifted” his deepwater drilling moratorium in October 2010. Obama also reversed an earlier decision by his administration to open access to coastal waters for exploration, instead placing a seven-year ban on drilling in the Atlantic and Pacific Coasts and Eastern Gulf of Mexico as part of the government’s 2012-2017 Outer Continental Shelf Program.

As expected the president’s energy speech is not receiving much praise from the oil industry. Obama claimed that the oil industry is sitting on leases instead of using these for oil production. Ken Cohen, Exxon Mobile Corp.’s vice president of public and government affairs addressed the President’s claims and reflected on his speech in a Wall Street Journal article:

Said Mr. Cohen: “90% of the words sound relatively right in line with what you’d hear us say,” in terms of enhanced use of natural gas, increasing energy efficiency, more research and development and more domestic production. But the speech didn’t address policies that Mr. Cohen said are hampering oil development, such as opening areas that are off limits to the industry, and insisted on uneconomic mandates for renewable fuel. Moreover, the mention that oil companies are hoarding unexploited leases is off the mark, he said.

“The notion that there’s some economic incentive to sit on a lease is wrong,” Mr. Cohen said, particularly when oil prices are above $100 a barrel.

Despite the recent tragic events of Japan’s nuclear power disaster, it was relieving to see the president not call a halt to nuclear energy. While it will most likely take time for nuclear energy to rebound from the catastrophic events, the president looked at the situation pragmatically by continuing to voice support for nuclear energy while requesting a Nuclear Regulator Commission safety review to make sure all existing nuclear energy facilities are safe.

Despite the criticism, it is still important to keep in mind that we are all stewards of the Earth and need to take care of the planet God has given us. We do not get a replacement and we must see that future generations have a planet they can live in without problems created by our generation. The President’s call to not waste energy should be applauded, and advice we should all heed. However, as the United States continues to define its energy policy it is also equally important to keep in mind we are called to not just be environmental stewards, but also financial stewards. Our energy policy should be for the well-being of the planet but also economically feasible without being burdened with costly subsidies and unintended consequence.

Full text from President Obama’s speech can be found here.

The American Enterprise Institute also provides and insightful critique on the President’s speech which can be found here.