Executive Viewpoint

Vol. 233 No. 9

Obama’s disturbing energy paper trail

In the political climate our nation finds itself in leading up to November, it’s often hard to parse out the pandering from the policy. Both President Obama and Governor Romney’s energy talking points confirm the fact that our home-grown energy resources are one of America’s greatest assets. However, the Obama campaign cannot deny the administration’s paper trail on energy policy—a paper trail that is, without a doubt, punitive toward oil and natural gas production, especially here at home.

During the 2012 Democratic National Convention (DNC), President Obama said his administration has offered policies to “develop a hundred-year supply of natural gas that’s right beneath our feet. If you choose this path, we can cut our oil imports in half by 2020, and support more than 600,000 new jobs in natural gas, alone.”

Obama’s record. President Obama is right on the abundance of natural gas supplies, and the fact that increased production of gas—and also oil—increases our nation’s energy security. However, while he will undoubtedly tout his administration’s record on energy policy, claiming that he has expanded access to resources and ramped up production, the oil and natural gas industry sees a different reality.

The Obama administration’s policies have done much more to hinder development, rather than encourage it. In fact, the majority of successes in increased production that Obama continues to take credit for have occurred on private and state lands, sheltered from the heaviest burden of federal bureaucracy. In particular, oil production on federal lands (both onshore and offshore) fell by 14% in 2011, while natural gas production fell by 11%.

When Obama’s federal agencies see an opportunity to regulate oil and natural gas development, they have—without fail—taken it. The oil and natural gas industry has had to jump through hoops to gain access to resources—hoops established by Obama’s Department of Interior and the Environmental Protection Agency, to name two. Through countless new federal regulations and bureaucratic inertia, these agencies have sought to curtail new development projects and discredit the industry’s long safety record.

Other crowd-pleasers from the President’s speech at the DNC belie his administration’s actions, as he demonizes the very industry whose actions he is taking credit for. President Obama says that he will “not let oil companies write this country’s energy plan, or endanger our coastlines, or collect another $4 billion in corporate welfare from our taxpayers.”

Industry’s great performance. This rhetoric distorts the reality that America’s oil and natural gas industry is the bright spot in our nation’s economy. It distorts the reality that the industry is one of the most productive and does not receive government welfare, subsidies or handouts. Companies’ tax provisions are like those that all American manufacturing industries receive—deductions that enable independent producers to take the risks to find new oil and natural gas. Thus, independent producers reinvest 150% of their revenue stream into new American E&P—simultaneously creating jobs and securing our energy future.

It’s incredible that the Obama administration seeks to punish one of the only industries creating jobs in this dismal economic climate. In fact, in the August jobs report, the only good news was thanks to the oil and natural gas sector. According to Bureau of Labor Statistics (BLS) data, oil and natural gas development jobs grew by 1,100 employees last month, to 197,300 on a seasonally adjusted basis. That’s a 12% increase from last year. These are well-paid jobs that provide blue-collar Americans with the resources to support their families. These are well-paid jobs that go to American engineers and scientists, who are advancing cutting-edge technology.

Governor Romney’s plan for energy development is not written by oil companies, but written for the American people. This election has mostly been centered on the economy, and Romney’s energy plan provides a true pathway to economic recovery. He understands that a thriving energy sector means job creation and economic growth for our—a true “plan for a stronger middle class.”

Some of the economic advantages that follow from robust development include a $500-billion boost to the American economy. America’s oil and gas industry has been a virtual job-creating machine. Upstream alone, employment has jumped more than 60%, or nearly 194,000 jobs over the 2001-2011 period. Upstream employment has more than doubled in many states over the past 10 years! Look no further than North Dakota, Texas, Colorado and Oklahoma—states with some of the lowest unemployment rates in the nation. In states like Ohio and Pennsylvania (swing states, mind you), manufacturing is coming back to rust-belt towns that have been decimated by economic stagnancy for decades.

With the increasingly disturbing violence in the Middle East and North Africa, the fact that increased energy production at home means less reliance on oil imports from turbulent nations (often hostile to the American way of life) should not be taken lightly by the American electorate. Thankfully, North American energy independence does not have to be generations away. The U.S. has achieved the top spot in global gas output, and energy experts predict that the top spot in oil production will be ours by 2020, surpassing Saudi Arabia and Russia. The energy security gains from increased American energy development would be tremendous.

The American people have a stark choice. Obama and Romney’s energy policies, while they may sound similar in stump speeches, could not be more different in reality.