The Great Destroyer: Barack Obama's War on the Republic (24 page)

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Authors: David Limbaugh

BOOK: The Great Destroyer: Barack Obama's War on the Republic
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“HUNDREDS OF THOUSANDS OF LOST JOBS”
Eleven months after the Gulf drilling ban was technically lifted, drilling there was still negligible. The duplicitous White House wanted both to eat and keep its cake, reaping the PR benefits of pretending to encourage drilling, while in fact impeding it in every conceivable way. A study commissioned by the Gulf Economic Survival Team reported that the industry had signaled its intent to return its drilling operations to full capacity and had invested billions of dollars in well-containment technology, which effectively robbed the administration of safety as an excuse for its obstruction. The study also revealed that the failure of Department of the Interior regulators to understand complex new regulations—crafted by the administration’s politically appointed bureaucrats—was a major contributor to the delays. The study concluded that the failure to safely restore oil and natural gas exploration levels in the Gulf would take a major toll on jobs and would reduce energy security.
According to the study, the 2012 “activity gap”—the losses stemming from the administration’s delayed permit process—could total 230,000 American jobs, more than $44 billion of U.S. GDP, nearly $12 billion in tax and royalty revenues to state and federal treasuries, U.S. oil production of more than 400,000 barrels of oil per day (150 million barrels for the year), and a potential reduction of the amount that the United States spends on imported oil of around $15 billion.
Detailing the permitting hold-ups, the study found that in the six months following the lifting of the moratorium in October 2010, there was a 250 percent increase in the backlog of deepwater plans pending government approval, an 86 percent drop in the pace of regulatory approvals for plans, a 60 percent drop in all Gulf of Mexico drilling permits, and a 38 percent increase in the time required to reach each regulatory approval.
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James Diffey, senior director of IHS Global Insight’s U.S. Regional Economic Group, said the study found that “an increase in oil and gas activity reverberates throughout the broader economy. Each new hire (in the Gulf) results, on average, in more than three additional jobs in an array of industries around the country”—not just in the Gulf region.
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A separate study by Quest Offshore Resources concluded that if the administration had really lifted its moratorium in October 2010, 190,000 more jobs, including 8,500 in California alone, would have been created in the United States over three years. The upshot of these avoidable delays was hundreds of thousands of lost jobs, billions of dollars of foregone federal and state tax revenues, and an increased dependence on foreign energy.
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Providing further proof of Obama’s drilling obstructionism, Greater New Orleans Inc. reported in November 2011 that the administration had approved only 35 percent of the drilling plans for the Gulf of Mexico so far in 2011, and that it took an average of almost four months to get approval from BOEMRE. In previous years the approval rate had been 73.4 percent, more than double Obama’s record, and the approval time had historically averaged sixty-one days, almost twice as fast.
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Equally troubling, these lags were damaging beyond Louisiana, because one deepwater rig alone can create 700 local jobs. As Heritage’s energy expert Nick Loris wrote, “Allowing access for exploration and creating an efficient regulatory process that allows energy projects to move forward in a timely manner will not only increase revenue through more royalties, leases and rent. It will also create jobs and help lower energy prices in the process.”
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In January 2012, a report commissioned by the American Petroleum Institute concluded that the combined effect of the administration’s moratorium and “permitorium” could cost the United States more than $24 billion in lost oil and natural gas investment in the next several years. As a result of these delays, the study found, capital and operating expenditures fell over the two preceding years by $18.3 billion. The region was responsible for about 6 percent of global investments in crude oil and natural gas, but it would have been nearly 12 percent for 2011 had the delays not been imposed. The report stated, “As a result of decreases in investment due to the moratorium, total U.S. employment is estimated to have been reduced by 72,000 jobs in 2010 and approximately 90,000 jobs in 2011.”
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OTHER ASSAULTS ON DRILLING
In fact, these leases had not been approved casually, but after some seven years of scrutiny and debate. This is part of a larger pattern of the federal government blocking energy leases that have been the subject of environmental protests, despite the nation’s current economic difficulties. The federal government at the time was reportedly holding $100 million for energy leases in the Rocky Mountains that have been delayed.
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As if this weren’t enough,
Investors Business Daily
reported that Salazar also blocked the leases of oil shale rights in five Western states “estimated to hold between 1 trillion and 2 trillion barrels of recoverable oil.” The Energy Department’s Argonne National Laboratory says that 800 billion of these are recoverable with current technology. In addition, a 2008 Utah Mining Association report states that the West’s oil shale gives America the “potential to be completely energy self-sufficient with no demands on external resources.” As the
IBD
editors noted, “If we could drill in places like that, maybe oil wouldn’t be gushing a mile under the Gulf of Mexico.”
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The campaign against drilling also reached Ohio, where Obama’s Department of Agriculture decided to delay shale gas drilling for up to six months by cancelling a mineral lease auction for Wayne National Forest, a move that could cost up to 200,000 jobs and impede access to affordable energy. The delay was sought by environmentalists who ideologically oppose the process of hydraulic fracturing, known as “fracking.”
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This process involves injecting high-pressure fluids to fracture the porous shale rock, enabling the extraction of the oil and gas trapped inside. Environmental activists claim fracking uses chemical additives that contaminate groundwater. This is a dubious assertion, since the shale formations used in fracking are thousands of feet deeper than the drinking water aquifers they allegedly contaminate and are separated from them by solid rock. As EPA chief Lisa Jackson admitted to a House Oversight Committee, “I’m not aware of any proven case where the fracking process itself has affected water.”
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Even in cases where problems arose from gas extraction during fracking, they were not due to the fracking process, but to drilling operations that weren’t performed correctly, according to a study by the Energy Institute at the University of Texas at Austin.
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Nevertheless, the Obama administration is erecting regulatory impediments to fracking, apparently unconcerned that they risk destroying the economic boom fracking has brought to parts of Ohio, North Dakota, Pennsylvania, and elsewhere. The Ohio Oil and Gas Energy Education Program estimated that drilling in the Utica Shale, which would be suspended, would produce up to 204,500 jobs by 2015—though the USDA estimated the delay would only affect up to 200 jobs. House Natural Resources Committee chairman Doc Hastings remarked, “The President’s plan is to simply say ‘no’ to new energy production. It’s a plan that is sending American jobs overseas, forfeiting new revenue, and denying access to American energy that would lessen our dependence on hostile Middle Eastern oil.”
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Interestingly, while Obama vigorously fights fracking, he still boasts that his beloved government was instrumental in developing fracking technology, which he believes bolsters his case for government support for new energy projects. In fact, according to Nicolas Loris of the Heritage Foundation, this is just another of Obama’s whoppers, because long before the government became involved, the private sector established the process.
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Inaccurate or not, President Obama better be careful not to boast too much, for his perpetual gaffe-making vice president, Joe Biden, recently warned that fracking causes earthquakes.
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“MY WARNING IS NOT JUST SPECIFIC TO KEYSTONE”
In November 2011, under pressure from environmental activists and certain Nebraska officials, the Obama administration announced it would delay until after the 2012 presidential election the construction of the Keystone XL pipeline, a $7 billion project that would transport more than 700,000 barrels of oil daily from Alberta, Canada to Oklahoma and the Gulf Coast in Texas. The State Department said it was ordering a review of alternative routes in lieu of the environmentally sensitive Sand Hills region of Nebraska.
Even though the pipeline would decrease America’s foreign energy dependence, create thousands of jobs at a time when 14 million Americans were unemployed, and generate a projected $5.2 billion in property tax revenues for the states the pipeline traversed—Montana, South Dakota, Kansas, Oklahoma, Nebraska, and Texas
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—Obama yielded to environmental activists who threatened to withdraw their support for his reelection.
Obama seemed unconcerned by a warning from Canadian Prime Minister Stephen Harper that delaying the pipeline’s approval would force Canada to ship its oil to Asia instead of to the U.S. “This highlights why Canada must increase its efforts to ensure it can supply its energy outside the U.S. and into Asia in particular,” Harper had said, referring to the prospect of Obama delaying approval. “Canada will step up its efforts in that regard and I communicated that clearly to the president.”
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Just as he has tried to distance himself from controversial actions of his Justice Department, the EPA, and other agencies, Obama pretended that the delay was a purely administrative matter within the State Department. “I support the State Department’s announcement today regarding the need to seek additional information about the Keystone XL pipeline proposal,” he declared.
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However, this was obviously a political decision coming straight from the top, as the State Department itself had found that the pipeline would not pose substantial environmental risks.
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In fact, Obama personally intervened in a Senate fight over the pipeline, lobbying Democrats to reject an amendment calling for its construction.
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Jack N. Gerard, president of the American Petroleum Institute, said Obama’s decision was “all about politics and keeping a radical constituency, opposed to any and all oil and gas development, in the president’s camp in 2012. Whether it will help the president retain his job is unclear but it will cost thousands of shovel-ready opportunities for American workers.”
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Obama’s stated concern about the pipeline’s environmental impact was sorely misplaced. Indeed, there are already 50,000 miles of oil pipeline in the United States that provide enormous economic benefits with very little environmental damage.
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Moreover, as the Heritage Foundation’s David Kreutzer observed, blocking the pipeline will actually
increase
the risk of environmental damage. As Kruetzer wrote,
Let’s acknowledge that blocking the XL pipeline won’t stop development of the oil sands. It will slow some of the development, which will increase the world price of petroleum. However, the major impact of blocking the pipeline would be a significant diversion of the oil to non-U.S. consumers…. [Canadian oil will travel] an extra 6,000 miles across the Pacific in oil-consuming super tankers and then [be refined] in less-regulated Chinese refineries. In addition, be aware that replacing the Canadian oil means the U.S. also must import more oil by tankers, which are less efficient than pipelines.
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As there is no pleasing leftists, even when they win, some environmentalists were dissatisfied that Obama didn’t summarily kill the pipeline. One such activist, Glenn Hurowitz, a senior fellow at the Center for International Policy, feared that Keystone XL could still be approved by a future Republican president. “I’m a little dismayed at suggestions that this kick-the-can decision means environmentalists will enthusiastically back President Obama in 2012,” Hurowitz said. “Is the price of an environmentalist’s vote a year’s delay on environmental catastrophe? Excuse me, no.”
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But others focused on the economic costs of Obama’s decision. The Heritage Foundation’s Nicolas Loris argued that the delay was blocking new oil imports from Canada and preventing the creation of thousands of private-sector jobs. “Building the pipeline,” said Loris, “would directly create 20,000 truly shovel-ready jobs; the Canadian Energy Research Institute estimates that current pipeline operations and the addition of the Keystone XL pipeline would create 179,000 American jobs by 2035.”
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In a bizarre attempt to deflect these kinds of charges, Obama declared, “However many jobs might be generated by a Keystone pipeline, they’re going to be a lot fewer than the jobs that are created by extending the payroll tax cut and extending unemployment insurance.”
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