February 2012 - Volume 20, Number 1
Obama Kills Keystone While Defending Energy Record
by Marita Noon, Executive Director, Energy Makes America Great, Inc.
Within 24 hours of rejecting the Keystone XL pipeline project — angering unions, industry, and Republicans — President Obama released his first campaign ad touting his record on energy. The ad cites a study from the Brookings Institute and implies that President Obama has created 2.7 million jobs in green energy, a number that is “expanding rapidly.” Next the ad brags about the fact that for the first time in 13 years, America is now less than 50 percent dependent on foreign oil. Both numbers have some truth — but both have little to do with the President’s efforts.
First, the jobs number. 2.7 million green jobs is the total number of green jobs in the economy — many of which existed long before President Obama took office. Additionally, according to a Reason fact check, while the 2.7 million number may be “clean” jobs, only a small fraction of that number are actually in the “green energy” industry — 140,000 according to Brookings — and this was before thousands of jobs were lost at Solyndra, Stirling Energy, Range Fuels, or other green energy companies that have gone under in the last few months.
Next, the claim that America is now less dependent on foreign oil. This is true, but deceptive. Our lowered dependence is not because the President has done anything good, it is in part because of the bad economy. People are using less oil, therefore we need less from foreign sources. Additionally, we are producing more oil domestically. North Dakota’s Bakken Field has doubled its production in the last two years — from 246,000 barrels a day to 509,754 in November 2011. Just this domestic production is enough to completely displace oil imported from Iraq. President Obama cannot take any credit for the Bakken windfall. In fact, his administration is threatening a moratorium on fracking, which would send the oil patch into a free fall — thousands of workers would be unemployed overnight and the U.S. dependence on foreign oil would be up past 50 percent.
Obama’s EPA doesn’t like states having their own regulations; they prefer that everything be done on the federal level where they are more insulated from local input. When states can make their own decisions, the dramatic impact of regulation becomes obvious. Pennsylvania allows horizontal hydraulic fracturing (HHF), New York does not. The contrast is stark. In Upstate New York, property taxes have been raised due to the known oil assets, but a HHF moratorium prevents people from cashing in on their bounty. In many cases, landowners’ annual tax bill is more than their mortgage. Local governments are facing eminent bankruptcy. Farmers have had to shut down their farms and find work in the oil industry across the state line in Pennsylvania. What they see in Pennsylvania is a vibrant economy. Families are moving in. New homes are being built. Farms are buzzing with activity and new equipment. Help wanted signs are everywhere. In the last few years, unemployment has dropped from 10 percent to 5 percent.
The EPA has been piling regulations on the energy creators that will raise costs of electricity — hurting consumers and businesses. New rules such as the Cross State Air Pollution Rule, the Utility MACT Rule, and Coal Ash Regulation will force coal-fueled power plants to shut down and kill thousands of jobs. Just this week, the state vs. federal regulation issue cropped up when environmental groups announced they would sue the EPA to accelerate the agency’s regulation of coal ash — causing coal ash to be regulated on a federal level by the EPA as hazardous waste, adding costs of up to $110 billion over twenty years and killing an estimated 316 thousand jobs. Currently, states make their own individual decisions that fit their unique circumstances about treatment and disposal of coal ash.
It is not just the EPA. Under the Obama administration, proposed listings of endangered species have gone up, rushed through with spurious science. Oddly, the habitat of the proposed species is often an area with known natural resources — such as the oil-rich Permian Basin of West Texas and Southeastern New Mexico. For the past year, locals have been fighting the proposed listing of the sand dune lizard knowing that the Endangered Species Act (ESA) listing could decimate the region — much like the spotted owl listing did to the logging communities of the Pacific Northwest.
On Wednesday, January 18, the New Mexico Association of Counties unanimously approved a resolution in opposition to the listing of the sand dune lizard as an endangered species. Listing proponents claim the industry is using scare tactics to stir up local opposition to the listing. However, even though the lizard is currently in a “proposed” status and is not officially listed, there is already an economic impact on the region. For example, a local mining company has a four-mile water pipeline that needs to be repaired. The Bureau of Land Management (BLM) will not allow them access to the line because it is in the lizard’s habitat. Instead, they’ve been told that they must build a new pipeline that will go around the proposed habitat. The new pipeline will be twenty miles long and cost estimates are at $30 million or more — which will likely require extensive environmental impact studies before the work can commence. And this is before the lizard has actually been listed. Imagine all the obstacles and increased costs industry will have if the lizard is listed.
America’s lowered dependence on foreign oil is not because of President Obama, it is in spite of the efforts of his administration. It is not due to government encouragement, but rather due to industry innovation and American grit and determination.
The proposed moratorium on fracking in the Bakken Field would kill jobs, coal ash regulation could be the most detrimental of all of the new regulations, and the proposed listing of the sand dune lizard could turn a booming regional economy into a series of ghost towns.
There is plenty of talk about the proposed jobs killed by the President’s decision to deny the permit for the Keystone XL pipeline, but jobs have already been lost. For example, Welspun Tublar Company in Little Rock, Arkansas, makes steel pipe for the oil industry. They have 500 miles of pipe that was expected to ship out for the Keystone XL pipeline.
After President Obama announced he would delay his decision until after the November 2012 election (for which he’s now officially denied the permit), Welspun had to lay off 60 employees. The mother-in-law of one of the workers to lose his job says, “Obama is killing jobs on purpose. The more people he can get on the dole, the more control he has over them.”
In his frequent promises to focus on jobs, we just didn’t understand that he meant focusing on killing jobs in the oil, gas, and coal industries.
Despite the Obama campaign ad’s claims, President Obama is not creating jobs in the energy sector and he is not responsible for the reduction in foreign oil imports. His administration’s agenda-driven actions are, perhaps, more about bolstering the Democrat Party than boosting the American economy. If they can ban the use of fracking for oil and gas extraction, they will serve a near fatal blow to the domestic energy boom — which is a result of industry’s technological advances in hydraulic fracturing — and turn off the flow of new wealth into states formerly hit by hard times.
A government-dependent public tends to vote Democrat to insure the entitlements continue. The higher-paying jobs in the energy sector, the ability of landowners to prosper, and revitalized communities eliminate the need for federal handouts. Natural gas’s abundance has dropped prices to new lows, threatening the viability of highly-favored, taxpayer-subsidized wind, solar, and ethanol.
It is in the Democrat’s self-interest to brag about their energy record, while subtly using regulation to virtually end domestic energy development.
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