Fueling the Decline: How Obama’s Energy Policies Are Propelling Us to the Next $4 per Gallon Gas Crisis Print
By Ashton Ellis
Thursday, April 22 2010
The 1970s saw the birth of the environmentalism movement, and witnessed its rapid development from fighting pollution for the benefit of humans to fighting humanity for the benefit of everything else. Through litigation and bureaucratic administration, these zealots successfully made potential domestic oil fields off-limits and rendered opening a new refinery nearly impossible.

The only thing “energetic” about President Barack Obama’s energy policy is its unrelenting destruction of the capitalist spirit.  From maintaining the price-distorting regulations that artificially limit the supply of gasoline to cynically suggesting that his calls for more nuclear power plants and off-shore drilling will benefit taxpayers, the Controller-in-Chief is practicing his craft: sounding like a pragmatist while governing like a leftist. 

Consider the price of gasoline.  In a month’s time, Memorial Day arrives, bringing with it the start of the summer vacation season and the annual spike in gas prices.  Members of Congress will once again mistakenly claim the culprits are greedy oil companies trying to make “windfall” profits from motorists traveling to see grandma. 

Perhaps if Rep. Henry Waxman (D-CA), Chairman of the House Energy and Commerce Committee, furrows his brow tight enough, he might decide that the government needs to even the playing field by pouring billions – maybe trillions, why not? – into alternative fuels. 

Of course, neither of these conclusions start with the premise that government policies are the beginning of the problem. 

After the cognitive dissonance of the 1960s, hippies got religion in the form of earth worship.  The 1970s saw the birth of the environmentalism movement, and witnessed its rapid development from fighting pollution for the benefit of humans to fighting humanity for the benefit of everything else.  Through litigation and bureaucratic administration, these zealots successfully made potential domestic oil fields off-limits and rendered opening a new refinery nearly impossible. 

The result of all this rulemaking was to drastically reduce the supply of domestic crude oil and the refineries that turn it into gasoline.  But since demand for gas remains high, foreign producers stepped forward to supply the domestic shortfall created by the environmental left.  So now Americans buy oil at higher prices from countries like Saudi Arabia and Venezuela.  All for the sake of Mother Earth.  

Now, fast-forward to this year.  At first blush, President Obama seemingly ignored his environmentalist friends when he recently announced his decision to allow off-shore drilling near the Virginia coastline – perhaps within the visible horizon!  That came on the heels of several statements indicating support for increasing the number of America’s nuclear facilities, even if each failed to address where to put the refuse.  The howls of protest from the Sierra Club were almost loud enough to convince everyday Americans that the betrayal was sincere. 

Then came the fine print.  The areas now open to exploration are actually a fraction of the total made available under the Bush Administration, so the real story here is that Obama is reducing – not enlarging – domestic oil fields.  As for the overtures on nuclear energy, the Cato Institute’s Jerry Taylor points out that whatever the merits of the technology, the fact is building a nuclear power plant is impossible absent massive government subsidies.  So the net effect of Obama’s outreach towards nuclear power is really a move for more taxpayer spending to prop up a non-competitive industry. 

All this and we’ve yet to mention cap-and-trade, the centerpiece of the comprehensive energy reform agenda.  Though supporters claim it is market friendly, the reality is that the program would impose one of the largest tax increases in American history.  Every citizen who uses energy derived from oil, coal or natural gas would pay thousands of dollars more in taxes.  Like health care reform, the Obama Administration is using talk of markets as a smokescreen for grabbing more control of an entire sector of the economy. 

Gasoline is expensive because the supply of crude oil and refineries are artificially low, while the demand for gas is high.  Compared to alternative fuels, it is an abundant source of energy with the added advantage of enjoying well-established extraction, production and delivery methods.  Unlike health care, immigration, education and the financial industry, stabilizing the price of gas doesn’t take a “comprehensive” plan, just undoing a few senseless regulations.  Then again, maybe that’s the problem from Obama’s perspective: addressing the issue doesn’t present a way to centralize government power in Washington, D.C. – yet.