Growing economies need more goods and services at ever more affordable prices. Energy, a.k.a. the master resource, is no exception.
President Obama disagrees. In a stunning decree reversing his 2015 proposal to open 104 million acres in the Atlantic to offshore exploration, Obama just banned new oil and gas leasing in large swathes of eligible federal waters.
Those resources would have yielded real benefits for the American economy. Offshore wells could have produced an estimated 1.3 million barrels of oil a day by 2035, generating some 280,000 jobs—growth that would have rippled through the economy.
This reversal continues the White House-coordinated war on fossil fuels. In 2008, presidential candidate Obama stated unapologetically that electricity prices would “necessarily skyrocket” as a result of his energy plan, the Clean Power Plan.
More recently, Obama placed a de facto moratorium on drilling in federal lands and nixed the Keystone XL pipeline at an opportunity cost of 42,000 jobs. And just for good measure, Obama suggested slapping a $10-per-barrel tax on oil.
But even as Obama belittled the idea of cheap, abundant energy, the shale revolution was already ushering in an unprecedented increase in U.S. oil and natural gas production.
New drilling technologies perfected in the last decade have unlocked enormous domestic reserves of crude oil and natural gas.
And with the discovery that the United States sits upon the world’s largest oil reserves, we are on our way to a level of homegrown energy prosperity that was inconceivable a few years ago.
But while these achievements happened under Obama’s watch, they’ve taken place in spite of his agenda to keep fossil fuels in the ground.
Obama often couches his opposition to energy exploration as a concern for safety, citing the 2010 BP blowout.
But the oil and gas industry is safer now than ever. Advances in drilling technologies and computerized modeling data have allowed people to find and extract energy far more safely. Oil spillage has actually declined since the 1970s. And over the past decade, 99.7% of the oil transported to the United States via tankers has arrived safely.
Since the BP accident, the industry has adopted new measures to prevent spills. Professional engineers now inspect and certify each stage of the drilling process. Blowout preventers designed to contain spills have undergone tough testing and been modernized. Double-hulled tankers provide an extra layer of protection against groundings and collisions.
No one wants another accident to happen, especially energy companies. BP just got slapped with a record-breaking $20.8 billion fine for the Deepwater Horizon accident, which leaked an estimated 4.9 million barrels of oil in the Gulf of Mexico. With other settled and unsettled claims, BP has set aside $54.6 billion for the explosion and spill.
This equates to a loss of more than $11,000 per barrel that would have otherwise been sold at a profit.
The United States gets more than 60% of its energy from oil and gas, and will continue to require large quantities in the future. Obama’s decision to close off the Atlantic seacoast to offshore production will not change this fact. It will only increase imports and leave domestic consumers with higher prices.
A new energy philosophy is required at the very top of government to further the real, consumer-driven energy revolution.