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Committee Report Outlines Obama's Plan to Inflate Energy Costs


Posted by Cory Eucalitto on Friday, May 27th, 2011, 1:43 PM PERMALINK


As new drilling and extraction technologies become widely available, it is becoming clear that the United States in fact sits on the world’s largest energy reserves. Common sense would tell us that developing these resources would help lower costs to consumers, wean the country off its dependence on foreign energy, and create well paying, secure jobs. Instead, the President proposes to unfairly raise taxes on oil and natural gas producers by $60 billion.

Sadly, this is only the beginning.

A new report from the House Committee on Oversight and Government Reform, chaired by Rep. Darrell Issa [R-CA], lays out specific actions taken by the Administration through bureaucratic directive to deliberately cripple the nation’s oil and gas industry. It traces a stated desire to deliberately raise the price of carbon based fuels through extensive economic engineering. This, of course, is in order to force the transition to unproven, less efficient, and more expensive “green” technologies. Region by region, it shows the devastating effects of the more outrageous new rules and regulations.

The Appalachian Region, for example, is home to 110 years worth of newly accessible natural gas deposits. The new process of hydraulic fracturing (“fracking”), which allows horizontal drilling, has opened up these vast reserves to the country’s energy producers. In the process, a mixture of sand, water, and chemicals is injected into the well to release the gas or oil.

Even though fracking is already regulated by the states, and has been found safe by the Environmental Protection Agency (EPA), the Administration is working overtime to shut down this revolutionary new technique. The Department of Interior (DOI) is considering new regulations and EPA is backing away from its previous approval, which found that no environmental problems arise from the process. The Administration has turned fracking into a “political football,” putting its future in severe jeopardy. Never mind that it has increased North Dakota shale production from 3,000 bbl/d in 2005 to 230,000 bbl/d in 2010—essentially lowering the state’s unemployment rate below 4%.

The situation is even bleaker in the Gulf of Mexico. Following the tragic Deepwater Horizon accident, President Obama announced a six month moratorium on all drilling in depths greater than 500 feet, and suspended drilling on 33 wells under construction at the time. Coastal communities, including many in which one third of all jobs are involved with the oil and gas industry, were devastated. Even though the official moratorium ended in October 2010, DOI has since instituted a “permitorium,” bringing development to a halt through bureaucratic stalling. The permitting process for drilling activity, which at one time took just weeks, got so slow that a U.S. District Judge had to force the Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) to take action. Since February, 13 permits have finally been approved- 11 simply to resume previously permitted activity. If the situation described were somehow not ridiculous enough, new regulations require deepwater operators search for shipwrecks and buried treasure by running a full archaeological assessment.

The examples in the report go on and on. In Alaska, Shell has been ready to drill for four years. After investing $3 billion in the project EPA revoked a previously authorized air permit. The U.S. Fish and Wildlife Service (FWS) is stoking more uncertainty over how they will protect a new “critical habitat area” for polar bears.

In the Rockies, where the federal government holds millions of acres of land, the Administration has allowed new Bureau of Land Management (BLM) leases to drop to their lowest levels in twenty years. There are also instances of BLM changing the terms of a lease after it has been signed, something the report equates to signing a lease on an apartment allowing pets, and then being told that your dog is not allowed in.

Federal overreach is also slowing energy production in Texas, the nation’s most productive energy state. Seizing control of Texas’ air quality permitting system, the EPA overruled state regulations and implemented its own. FWS has also proposed placing the dunes sagebrush lizard, native to western Texas, on the endangered species list. This would allow FWS to limit production in the region that produces 20% of the nation’s total crude oil.

Each of these examples, and the report contains many more, shed light on how the Administration is purposefully raising the price of carbon based fuels. Throw in generous subsidies to handpicked “alternative energy sources,” and the Administration is convinced that it can engineer a transition to a greener tomorrow. Higher energy costs, job losses, increased taxes, and skyrocketing debt are of no matter. The Administration’s envisioned future is bright—until the sun sets and the wind stops blowing.  

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