energy independence

Gasoline Prices and the Obama Energy Policy

When President Obama took office, the national average gasoline price was $1.83 per gallon according to the Energy Information Administration. As of this writing, the national average gasoline price is $3.39 per gallon. There are many factors that determine the price of gasoline, not the least of which is turmoil in the Middle East. The price depends on supply and demand and upon the expectations of supply and demand.

I don’t know if the Obama administration is simply clueless on energy, or if there is a determined ideological effort to cripple fossil fuel supplies in order to promote renewable energy, but the effect of administration policy is to discourage and hinder domestic production of fossil fuels.

In September, 2008, soon to be Energy Secretary Steven Chu told the Wall Street Journal, “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” Gas prices in Europe averaged about $8 a gallon at the time.

Contrary to administration rhetoric that the U.S. should become more energy independent, administration policy seems to be directed to do all it can to stifle domestic production.

Following the Deepwater Horizon accident in the Gulf of Mexico, the administration imposed a drilling moratorium. That moratorium was lifted last October, but in fact still remains in force. The Interior Department has approved just one drilling application although more than 100 are pending. A federal judge ordered that the de facto moratorium be lifted but the administration has ignored that order. In fact, in early February, the federal judge held the Interior Department in contemp of court for dismissively ignoring his ruling to cease the drilling moratorium which the judge had previously struck down as “arbitrary and capricious.” Ironically, the de facto moratorium of Gulf drilling will deprive the federal government of $1.35 billion in royalties this year.

According to the Heritage Foundation, “Obama also reversed an earlier decision by his administration to open access to coastal waters for exploration, instead placing a seven-year ban on drilling in the Atlantic and Pacific Coasts and Eastern Gulf of Mexico as part of the government’s 2012-2017 Outer Continental Shelf Program.”

 The U.S. has abundant resources of oil and natural gas in shale deposits. According to the U.S. Geological Survey the U.S. holds more than half of the world’s oil shale resources. The largest known deposits of oil shale are located in a 16,000-square mile area in the Green River formation in Colorado, Utah and Wyoming. The USGS’s most recent estimates (April, 2009) show the region may hold more than 1.5 trillion barrels of oil – six times Saudi Arabia’s proven resources, and enough to provide the United States with energy for the next 200 years. But Obama’s Interior Department is reversing Bush-era policy by delaying leases saying they need to take a “fresh look” at the situation.

American-oil-shale

 

The EPA has added costly new regulations to refineries over concern with global warming. The EPA is also denying approval of the Keystone pipeline which would increase the amount of oil the U.S. receives from Canada by over a million barrels per day.

If all this were not enough, the Interior Department has instituted a new “wild lands” policy that will bypass Congress in establishment of wilderness areas which will further delay and restrict access to our mineral resources.

The next time you fill your car with gasoline, don’t blame the oil companies for the high prices, the fault lies squarely with Obama’s energy policy.

National Renewable Energy Standard Will Mean Higher Electricity Bills

The U.S. Senate is considering a nation renewable energy standard (RES) that would require 15% of all electricity produced in the U.S. come from so-called renewable energy sources such as wind and solar power by 2021. Currently about 3% of electricity is produced from wind and solar. Twenty-nine states have some form of RES; Arizona has a 15% requirement (by 2025), and California has a 33% RES requirement by the year 2020.

The renewable energy standard is a backdoor to Cap & Trade, and will cost us dearly because wind and solar generation of electricity are intermittent, very expensive, and requires conventional generation backup.

The Energy Information Administration (EIA) calculated “levelized” costs for various electrical generation systems. “Levelized costs represent the present value of the total cost of building and operating a generating plant over its financial life, converted to equal annual payments and amortized over expected annual generation from an assumed duty cycle. The key factors contributing to levelized costs include the cost of constructing the plant, the time required to construct the plant, the non-fuel costs of operating the plant, the fuel costs, the cost of financing, and the utilization of the plant.” The EIA calculated these costs in dollars per megawatthour as follows:

Conventional coal power: $100.40; Natural gas: $83.10; Nuclear: $119.00; Onshore wind power: $149.30; Offshore wind power: $191.10; Thermal solar power: $256.60, Photo-voltaic solar power: $396.10.

Note also, that the availability, i.e., the ability to produce electricity on demand, according to EIA, is 85% for coal, 87% for natural gas, 90% for nuclear, but only 34%-39% for wind, and 21%-31% for solar.

A Heritage Foundation analysis of a generic RES found that a 22.5% RES by 2025 would cause household electricity prices to jump 36%, and industry prices would rise by 60% by 2035. That would cost an average family an additional $2,400 per year. There would be one million fewer people working on average with the RES in effect. And as the mandated level of renewable use rises over time, so do the losses imposed on the economy. Summing up the impacts for 2012–2035 yields a total loss of $5.2 trillion in GDP.

Dr. Fred Singer opines: “Now, it is quite clear that wind and solar are not economic — and they probably never will be competitive, even when fuel prices rise significantly. So the RES mandate would mean that all of us taxpayers would support even more the RES rent-seekers and lobbyists, who are already milking the government for subsidies and tax breaks for the construction of wind farms and solar energy projects.”

The alleged rationale for RES is to reduce carbon dioxide emissions and thereby forestall global warming (now “climate disruption”) although there is no credible evidence that reduced emissions will have a measurable effect on climate. Another hyped reason is to decrease our dependence on foreign oil, but the U.S. has abundant domestic resources of fossil fuels. The Obama regime, however, seems to be doing all it can to make those resources unavailable.

National renewable energy standards for electricity will have the effect of a national energy tax which will raise rates on families and businesses, cause loss of jobs, and further depress the economy. What was that promise Obama made about taxes and the middle class?

Renewable energy standards are just another rip-off of consumers and taxpayers by rent-seekers, lobbyists, and radical greens.