Why Obama’s ‘All of the Above’ Energy Policy Won’t Ease Pain at the Pump

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President Obama talks energy at the University of Miami on February 23.

I have a brilliant idea that will solve the nation’s energy problem. We need to invest in a massive research program—I mean Apollo Project-sized—to invent a silver bullet. Because all I keep hearing is that we’re all waiting for a silver bullet to solve our energy woes, if only we could find one. Take President Obama during his speech at the University of Miami on Thursday:

We’re not going to, overnight, solve the problem of world oil markets.  There is no silver bullet.  There never has been.

That sounds like defeatist talk to me. I say take all the money we currently give in subsidies to the oil industry—that’s about $4 billion a year—and use it on a crash program to develop a silver bullet by the end of this decade. If that’s not enough money, we can borrow a little from defense—they already get nearly $700 billion a year, so they probably won’t notice a missing billion dollars here or there. (They certainly didn’t keep a terribly close eye on the bank account in Iraq.) They probably even have some spare bullets they could contribute to the cause.

So there’s the Bryan Walsh Silver Bullet Energy Program (trademark pending). Although I suppose there’s another option: actually taking energy policy seriously, which means understanding what the government can and can’t do on the price of gas. And that, judging from his Miami speech, is the direction President Obama wants to go. Which is fine, if a little inside the box. The question is whether the American public will go with him.

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Anyone who listened to the State of the Union speech last month would have been familiar with the themes: when it comes to energy options, Obama is in favor of all of the above and then some. Say you like drilling for domestic oil and natural gas, which has been booming (more or less accidentally) during his time in office? So does the President:

We’re not going to transition out of oil anytime soon.  And that’s why under my administration, America is producing more oil today than at any time in the last eight years.  That’s why we have a record number of oil rigs operating right now — more working oil and gas rigs than the rest of the world combined…

Last week, we announced the next steps towards further energy exploration in the Arctic.  Earlier this week, we joined Mexico in an agreement that will make more than 1.5 million acres in the Gulf available for exploration and production, which contains an estimated 172 million barrels of oil and 304 billion cubic feet of natural gas.

Or are you a big fan of energy efficiency, believing that the best source of energy is the one we don’t have to tap? So is Obama:

And after three decades of inaction, we put in place the toughest fuel economy standards in history for our cars and pickup trucks -– and the first standards ever for heavy-duty trucks.  And because we did this, our cars will average nearly 55 miles per gallon by the middle of the next decade.  That’s nearly double what they get today.

Do you believe the future lies in clean energy, in figuring out how to research and develop renewable sources of power that won’t worsen climate change? Then guess what — the President is on your side:

The payoff on these public investments, they don’t always come right away, and some technologies don’t pan out, and some companies will fail.  But as long as I’m President, I will not walk away from the promise of clean energy.  Your future is too important.  I will not  — I will not cede, I will not give up, I will not cede the wind or the solar or the battery industry to China or Germany because some politicians in Washington have refused to make the same commitment here in America.

With or without this Congress, I will continue to do whatever I can to develop every source of American energy so our future isn’t controlled by events on the other side of the world.

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So when President Obama says “all of the above,” he really means “all of the above.” And that includes—as he said early and often in his speech—domestic sources of oil and natural gas. That won’t make his environmental base happy—though his rejection of the Keystone XL pipeline buys him breathing room—but there’s no ignoring the fact that something truly remarkable is happening in domestic oil and gas production. The U.S. now depends significantly less on oil imports than it did a few years ago, and the Energy Information Administration (EIA) forecasts that net petroleum imports will shrink from 49% of total liquid fuel consumption to 36% by 2035. That doesn’t mean the U.S. is close to being self-sufficient on fuel—America still remains the world’s biggest net importer of crude oil, largely because we consume more than 20% of the global supply. But it is an amazing change of direction after years when it seemed like the U.S. would only become more and more dependent on Middle Eastern crude—and one that has benefited the domestic economy and the balance of trade.

What the President didn’t mention—what he almost never mentions directly now—was climate change. Clean energy definitely remains a part of the White House’s energy plan, but less for the climate benefits than for the possibility that it might take some of the price pressure off energy while creating American jobs. And the definition of clean keeps getting expanded: Obama talked about developing cars that use natural gas, a plan that’s economically dubious — you’d need to build a whole new infrastructure to deliver the gas to drivers — as well as environmentally questionable. In the post-Solyndra age, clean energy seems to function more as a colorful backdrop — Obama talked about visiting a lab working on energy efficiency — than as the core principle it was during his 2008 campaign. And climate change is an issue that isn’t talked about at all.

Still, at a moment when gas prices are hovering around $4 a gallon in some states and rising, and when Republican candidates like Newt Gingrich are essentially promising a return to $2.50 a gallon simply through the magic of drilling, Obama had some useful real talk for Americans:

You can bet that since it’s an election year, they’re already dusting off their 3-point plan for $2 gas.  And I’ll save you the suspense.  Step one is to drill and step two is to drill. And then step three is to keep drilling.  (Laughter.)  We heard the same line in 2007 when I was running for President.  We hear the same thing every year.  We’ve heard the same thing for 30 years.

Well, the American people aren’t stupid.  They know that’s not a plan, especially since we’re already drilling.  That’s a bumper sticker.  It’s not a strategy to solve our energy challenge.

The President is right: it’s going to take a lot more than drilling to solve our energy problem. It might even take more than a silver bullet. But rising gas prices have a way of turning energy from a policy issue into a pocketbook issue; if costs keep going up,  the President’s reelection hopes may depend on whether the American people really are as smart as he thinks they are.

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