Energy Policy


Dear Senator Murkowski.

I’m writing just to let you know how proud I am of you.  Maybe pride isn’t the right word here, but you are doing what I hope I would do in the same circumstances.  You are following your own light.  You are speaking your truth.  You had the courage, as some others lacked, to stay in the fight.  And you won.  Hallelujah.

Your win is an incredible gift to a country that so needs someone who can stand, even if just a little, on the outside of the duopolistic system that’s evolved; someone who isn’t blinded by party loyalty and is thus able to see things as they are.  America isn’t predominantly right wing or left wing, but center right and center left.  And you and I both know that the solutions to most of America’s most serious problems can be found in that place, where rigid ideology can take a back seat to problem-solving.

Let’s take climate change.  You are right, of course, that there is scientific consensus that the burning of fossil fuels is impacting the planet’s climate.  It may not be the calamity some are predicting, but then again it could be.  We just don’t know that yet.  What is clear is the activities of mankind are having an impact and something needs to be done.  I applaud you for not only recognizing this but having been willing to act.  It was a courageous and principled stand.

We both also know that, fantasies aside, the country is going to be using massive quantities of fossil fuels for decades to come.  With a balance of trade deficit as high as it is and with U.S. environmental standards in the world’s top tier, we need to be producing as much of those fossil fuels as possible here at home – oil and natural gas.  We can do it better than most countries and keep American jobs and dollars in America.  In this tough economic environment what better stimulus than putting Americans to work producing American resources.  Every barrel we don’t produce here must come from somewhere else.  We must also put an end to the delusion that hydraulic fracturing – a process critical to producing world class quantities of natural gas in this country – is a a threat to America’s water resources.  This has been a sub-myth of the myth that if we make it harder to produce fossil fuels in America it will move us to the renewable energy future faster.  We both know it won’t.  Yet we know that renewable energy future is important and is deserving of support.

In closing let me again reiterate my pride in you.  Perhaps part of this pride is that I first met you when you were a state legislator and you attended a program I was giving on the subject of “states and oil and natural gas”.  We talked and I’ve watched and been mightily impressed by your career ever since.  You have been a great Senator and I predict that now you can be an even greater Senator should you be willing to carry your hard-won independence into the U.S. Senate and speak truth to duopolistic power.  I recognize that you may need to bargain away some of that independence in order to again become Ranking Member of the Senate Energy and Natural Resources Committee, but you should nonetheless cherish the independent mantle you’ve earned.  You can become what Senator McCain never really was but claimed to be.  The Senate and indeed America needs a true maverick voice.

I hope you can be that voice.  You will have my full support.

Kevin Bliss

Washington, DC

There is a must-read opinion column in the Washington Post this morning by Robert J. Samuelson.  It’s entitled The Bias Against Oil and Gas.  It is spot-on.

Energy is critical to the healthy functioning of the U.S. economy.  It is, therefore, a crucially important issue for President Obama to get right–to address in a rational manner.  The point here is that Obama’s “bias” against oil and natural gas will have consequences.  These consequences include failure of his “energy policy” and quite possibly failure of his economic policy upon which so much, even rhetorically, rides on the over-estimated potential of renewable energy.  Worse yet, it means that Republicans may be handed an issue, when oil prices once again soar (and oil prices will again soar, trust me), that gets them re-elected before they deserve to be.  The loser will be the country.

The point here, and I am certain the prime motivation behind Mr. Samuelson penning the piece he did, is that there is time to correct course.  There is still time to get it right.

There are a couple of reasons in particular why someone as brilliant as Mr. Obama has gotten this issue so terribly wrong.   One, and at the top of my list, is that our president doesn’t really understand energy policy.  This is understandable.  Although Illinois is an oil and natural gas producing state, it is not Texas.  While once a significant producer, Illinois’ production has declined and oil’s economic significance to the state is limited.  Additionally, spending a career in Chicago and so little time as a Senator representing the entire state, President Obama has had little opportunity to be educated.  Thus he, like most Americans, has learned about energy not by first hand experience but by what he’s been informed about energy, and particularly about oil and natural gas, by popular culture.  Popular culture tells us that oil is dirty and is bad for people and the planet and the way to move ahead is to not drill any more dirty oil wells.  It tells us that solar and wind are clean and abundant and we must only try harder and that will be our future.  As nice as this sounds, however, it is myth.

Another reason Obama has this wrong is alluded to in Mr. Samuelson’s column.  It is the power of the environmental groups and the fact, quoting Mr. Samuelson that “[t]o many environmentalists, expanding fossil fuel production is a cardinal sin.”  Given that environmental groups are an important contituency of the Democratic Party, Democrats are loathe to challenge its orthodoxy.  Yet a rational energy and economic policy demands a overt challenge.  Unless challenged it will lead the country down a path that does not lead to energy self-sufficiency.  It will lead to even more oil imports in the years ahead.

Expanding domestic oil production is not inconsistent with our country’s, and the world’s need, to limit the burning of fossil fuels in the years ahead.  That need is properly addressed through legislation that will begin to put a cost on the burning of fossil fuels so as to discourage its use.  In the meantime, the goal of this country needs to be moving as much production as it feasibly can back to this country.  We must never lose sight that every barrel not produced at home will otherwise have to be imported.  And every barrel of oil imported amounts to hundreds of billions of dollars and thousands of jobs going overseas.

Energy and economic policy will only work if built on a rational foundation.  It is time to re-lay the footings and begin to construct an energy policy that has architectural grounding.   

 

I have very few complaints about our President and the job he’s been doing.  To date, Mr. Obama, while perhaps overreaching at times, has managed to hit the political sweet spot more often than not.  He is, by and large, managing to do the right thing.  His high polling numbers reflect this.  Where he has completely missed the boat, however, is energy policy.  What he is proposing for the country will simply not work.  What the Obama administration has proposed is fantasy, dangerous fantasy.  My critique here is not to declare opposition but to advocate in favor of a course correction.  What’s been proposed is good, indeed, admirable, but it is not sufficient to accomplish the administration’s stated goals.

A couple of recent Op-eds are useful in helping to explain why what Obama is proposing will not work as represented.  The first appeared last week in the Washington Post.  Authored by James Schlesinger and Robert L. Hirsch, it is entitled Getting Real on Wind and Solar.  The second was in this morning’s Washington Post.  It is Robert J. Samuelson’s Selling The Green Economy

As I’ve said many times before on this blog, what the country needs to do, in addition to that which has been advocated by Mr. Obama in incentivizing and encouraging the development of new and clean energy technologies, is to recognize the inevitability of fossil fuels in our economy for the next two decades.  This is cold, hard reality.  Given this reality, the focus needs to be producing more oil and particularly cleaner burning natural gas, here on the North American continent.  For U.S. energy policy to finally succeed the country must face down the twin enemies of overseas imports of oil (this because our transportation sector is so heavily dependent on oil – 96%) and carbon emissions.  Increasing domestic production of both oil and natural gas, while not meeting the second goal–decreasing carbon emissions–, is our only viable alternative if we are to succeed with goal number one — decreasing foreign imports.  It will be through our climate change policy that we reduce emissions either through implementation of a cap and trade system or a carbon tax.  This will be what reduces our use of fossil fuels.  In the meantime, moving more energy production onshore in North America not only increases domestic energy security, it gives our economy a gigantic boost in the form of dollars circulating in America instead of being shipped abroad.  We can no longer afford the money drain.

Environmental groups and their followers need to lose the certainty that supporting domestic production, offshore and onshore, is yielding to the enemy.  It isn’t.  It is facing the fact that the country can no longer afford foreign imports, which is and has been for years the default when domestic production is stymied.  Instead, we need to bring the production home and focus on reducing carbon emissions through enactment of workable climate change legislation.  It can work.  We simply need to make it national policy. 

I’ve had on the docket for posting for a couple of weeks now the topic of sustainable agriculture.  I am fascinated by it and find it an important and necessary demand-side component of a rational national energy policy.  Leaving details for a future column, which I promise will follow, here’s a preview of the issue from George F. Will and his column in today’s Washington Post.  Rather than energy, of which he does make note, Will’s focus is the health impacts of our perverse and skewed national agriculture policy.  I think even those who normally don’t read Will for ideological reasons will find this column important and valuable.  It’s entitled Where the Obesity Grows

There are a number of ways to judge the success of a presidency.  There is the historical perspective that takes a great many decades to determine with any accuracy.  There is whether the president was able to win re-election, always an important indicator of success.  And, there is whether, when the president is term-limited, the country swings wildly in the opposite political direction when picking the president’s successor.  It is possible, as we’ve just seen, for a president to win re-election yet leave office with abysmally low ratings and a successor that stands for just about everything that he didn’t.  In President Bush’s case, I would argue that his winning re-election was not so much an indicator of his popularity or “success”, but a complete lack of enthusiasm for his opponent.  The Democrats in John Kerry simply didn’t give the country a choice it found acceptable–better the devil you know.  That Bush left office deeply unpopular and with a successor who is his polar opposite in almost every way–personality, intellect, political philosophy–says something about how deeply unpopular, and I would argue “successful” George W. Bush was.

Having last week finally seen the complete unveiling of Barack Obama–no, not a centrist but a true blue Democratic liberal–it is interesting to speculate on how the American public is ultimately going to judge its new leader.  The 2010 mid-term elections will give us a first indication.  Then will come the 2012 general election.  Finally, should Obama be re-elected in 2012, there will be the election of his successor in 2016.

I’m not going to speculate on outcome.  I have no clue at this point.  I am going to suggest scenarios, however, that may give us some indicators.  Let me start by observing that it is entirely possible that by 2012 the bloom will be off the Obama rose but that the Republicans will still be in such philosophical disarray (which includes, in my book, clinging to the southern conservative model of Republicanism) that anyone the Republicans select will be doomed, ala John Kerry in 2004.  Of course, if Obama is despised at that point, which I doubt, it could be that almost any Republican could be elected.  Let’s hope this is not the case for the sake of our country.

Another scenario is to posit Barack Obama as the Democratic Ronald Reagan.  By this I mean a someone who, while clearly a darling of the ideological extremes of his party, is also able to capture a significant amount of independents and centrist members of the opposing party.  To accomplish this it is important that one be charismatic (check), a great communicator (check), and I would argue one more thing.  It will take someone who while talking enough of line to appease his ideological base, delivers policies that are mainstream enough that they don’t alienate the center, where the majority of American electorate resides (unknown).

Now this is where it gets tricky with Barack Obama.  He has announced to the delight of his party’s liberal base a very “liberal” agenda.  How will centrist America take to this?  I would argue that one thing that Ronald Reagan had going for him, that Obama does not, was a Congress that was never entirely in his camp.  In other words, Ronald Reagan never experienced having a Republican majority in both the House and the Senate.  While he had the Senate eventually, he never had a Republican House majority.  I would argue that this required him to moderate his course and deliver a product that was less ideologically conservative than it might otherwise have been and than what he might otherwise have preferred.  Given that most of the electorate is in the center of the political spectrum, this need to moderate arguably inured to Reagan’s political advantage.  Ronald Reagan both won a resounding re-election campaign in 1984 and left office in 1988 highly popular, replaced by his vice-president.

Using the Ronald Reagan model, Barach Obama doesn’t have the barrier (I would also say “advantage”) that Ronald Reagan had.  Unlike Reagan, Obama has healthy majorities in both the House and the Senate.  The only thing he does have that is arguably somewhat similar is a non-filibuster proof Senate.  That could well yet serve him well by holding him back from delivering a more liberal ideological product than he might prefer, but it could also save his political neck.  Since it is less of an obstacle than was Ronald Reagan’s obstacle, it may, however, prove less beneficial.

Of course, a third alternative exists.  America is indeed ready to make a major political shift from center-right to left/center-left.  This could be aided by an economy that is among the worst in the country’s history.  This will depend upon when the economy recovers and which party gets the credit.

I am disinclined to believe the American electorate is radically re-aligning itself to the left.  It will tolerate health care reform and education reform, but only so long as it delivers, on budget.  It will not tolerate huge deficits and massive new unfunded entitlement programs.  It will not tolerate massive new taxes, including taxes masquerading as greatly higher bills for electricity caused by an ill-conceived cap and trade system.  It will also tire of energy program that fails to accomplish its stated objectives (likely, as I pointed out in my posting yesterday).

The bottom line is that this story has yet to unfold.  It could go in many ways.  It will interestingto watch.  It will also be scary, as the country has so much at stake.  Had this been normal times, with an economy that was anywhere withing the range of normal, this liberal experiment that Obama’s proposing might have been an interesting and valuable exercise for the country.  In times of economic crisis, it seems rash and dangerous.  Let’s hope for the best case scenario, for failure could be unthinkably bad.  Let’s hope that Barack Obama does, indeed, turn out to be a liberal Ronald Reagan.

To say I was disappointed in President Obama last week is an understatement.  I had hoped that his promise of change meant a more sincere effort to develop public policy rationally and less ideologically.  I’d had enough of ideological driven policy under President Bush.  I hoped for more under President Obama.  I was wrong, because although our President and government changed, our system dominated by two parties, which engage in mortal combat for power, did not change.  That means that party ideology matters more than rational solutions to America’s problems.  Also not changing was the system’s toleration for policy driven by interest groups within the parties.  The two are highly related, unfortunately.  With appeasement of interest groups comes acceptance of their prescription for changes in public policy, notwithstanding what might be rational or best for the country. 

Vice-President Cheney got no end of criticism for formulating over a number of months a national energy strategy without consulting with environmental groups.  Now, last week we have President Obama announcing a national energy strategy within 5 weeks of his taking office.  There was no pretense of process for forming a new national energy strategy, he and his team just did it.  I can also assure you that as many industry advocates had a share in development of Obama’s plan as there were environmentalists developing Cheney’s.  There have been no screams of outcry this time though.  I guess it’s because environmentalists wear white hats and “big oil” black hats and the former is inherently about protecting the public interest and the other is all about exploiting it for profit.

This is the “change” that Obama has brought to Washington–not change in the way policy is developed but a change in the insiders who are consulted and the corresponding results.  The country is now unconcerned with domestic oil and natural gas development, as was a focus of Bush-Cheney policy, it is now concerned with promoting renewable fuels.  It’s not the change we needed.

I feel very confident in saying that the energy plan announced last week by President Obama won’t work.  Of course, alteration may yet take place that would alleviate some of my concerns, but for now the energy course the President appears to have set is one that’s deeply flawed.  It’s pushing string.  It’s picking winners and losers.  It’s developing a course of action based on an incomplete understanding of the problem.  The result is a plan of action that fulfills special interest fantasies but is almost totally disconnected with reality.  

My prediction is that if Obama pursues the energy policy he announced by virtue of his budget and address to the nation last week domestic oil and natural gas development will wither.  Yes, we will develop more renewable sources of energy, perhaps even matching the President’s goal of doubling the amount of supply from such sources.  Yes, too, we might put more efficient automobiles on the highway and use less gasoline.  But, these steps will not significantly reverse the country’s dependence upon foreign oil which causes so many American dollars, and thus American jobs, to flow overseas.  His policy, in fact, exacerbates the problem by withdrawing all tax incentives for domestic production and, indeed, raising the tax burden.  Actions by Secretary of the Interior Salazar to reduce access to public lands for oil and natural gas development also make things worse.  This means we’ll be producing even less than the inadequate amount produced domestically during the Bush administration.  This can only mean increased importation of oil since the other steps we’re taking are completely inadequate to themselves stem that tide.  The fact is that for the Bush policy of increasing to domestic production to have worked to its potential, the country needed to have opened the Arctic National Wildlife Refuge and restricted offshore lands to development.   The Democrats (and a few Northeast Republicans) saw to it that that didn’t happen. 

What the country needs is a “doing it all” approach to energy policy.  It needs to raise gasoline taxes in a revenue neutral way to send a powerful message that oil is not cheap.  Then it needs to encourage domestic production and the incentivization of renewable energy.  It’s yes to it all.  A significant problem is the course of action I’m advocating is that it would be unpopular with environmental groups and President Obama has accepted their worldview by default.  Without ever having been presented the complete picture, our President has apparently made his decisions. 

I had hoped that General Jones would have been at the table in this debate, given his familiarity with the national security consequences of imported oil.  It seems, however, that he wasn’t.  He’s apparently still settling into the job and visiting foreign lands.  He may be as shocked as anyone by the abrupt early announcement of so significant a policy.  My hope for the country is that this debate is not yet over and that maybe General Jones may yet be able to have some influence. 

As I indicated last week, if President Obama’s proposals for health care and education reform are as well thought out as his energy policy, the country is in trouble.  Maybe Obama knows more about the other two, but he clearly knows little about energy.  And the failure here will be not just America’s ability to become a little less dependent upon foreign oil, it could be a political time bomb giving the Republicans a volatile issue just in time for the next elections (2010 and 2012).  If natural gas and oil prices rise as they most certainly will as the world economy revives, the rise in price will be as stunning and as economically shattering as were the price rises of last year.  A public that is just, hopefully, getting its feet back on the ground economically will not be pleased with high energy prices taking money out their wallet.  It will also not be pleased by Obama’s insufficient efforts to increase domestic supply.  It is entirely plausible that a Republican Party that has not yet learned its lessons will be back in power in the House or the Senate or even the White House before the Party is ready.

Let me close with one final observation on the “change” that Obama has apparently brought to Washington.  I hoped for change where the President could sit down and work out differences with opposing interests and, in dialectic fashion, advance a rational agenda.  Instead, you have the American President taunting industry lobbyists in the last few days to bring on the “fight”.  Mr. President, this shouldn’t be about fighting and competition for supremacy, it should be about crafting a policy that works for America.  Our first indication that we’re on the right road will be when both industry AND the environmental groups are equally unhappy.  Clearly that’s not the case and what you’re saying to me is that you’ve made your decision, that you know all that you need to know, and that you’re not willing to listen, all a mere five weeks out of the gate.  Disappointing indeed.

First the speech, now the budget.  We’re beginning to see that Obama is no centrist after all.  His agenda is distinctly to the left of left of center and he’s not an incrementalist.  He’s setting about to change America radically and fast.

America needs change.  The problem is that our choice for political leadership in this country is between a hyperactive Democratic Party with a leftist agenda and tired and worn out Republican Party with a right wing, moralistic, and arguable overly-free market agenda.  The fact remains that there exists a huge amount of real estate between the two extremes, real estate upon which I would argue America would be better building its future home the than real estate being proposed by the two American parties.  And today, one party is in control and it is on their real estate that the we’re proposing to build.

What concerns me the most about Obama’s proposals is the relative lack of thought and preparation that is behind them.  He has produced all of this in just one month!  Echoing what David Brooks observes in his column in the New York Times today (The Uncertain Trumpet) Obama is merely laying out a conceptual framework for the future but he is leaving it to others to work out the details.  That’s dangerous when the others are Congressional leadership dominated by Nancy Pelosi Democrats.  I am concerned that facts (rationality) will play too small a role and leftist ideology to large a role as laws are passed and programs are initiated to build on the Obama conceptual framework.  Likening policy to a road map, it needs to be based upon reality in order to deliver us to the desired destination.  If based on fantasy, it is unlikely to lead us to where we want to go.  Reality and rationality must trump shallow and overly-idealistic ideology.  

I will keep returning to energy as an example as, substantively, I know it best.  On energy, the budget is very “command and control” and sets about picking winners and losers.  One loser appears to be all things “oil and gas”.  A first glimpse at Obama’s energy budget reveals that he proposes elimination of almost every incentive for domestic oil and natural gas production on the books.  It also appears to eliminate all oil and natural gas research and development.  This is not wise when the American economy is dependent upon foreign oil to fuel an economy that will not even under the most optimistic scenarios be able to wean itself from oil for transportation for decades.  Complex issues require complex solutions.  It doesn’t appear we’re going to get them from Obama.  He’s too busy painting colorful conceptual murals of the America he envisions and leaving it to others to try to turn that fantasy into reality.

In Obama’s defense, I suspect most of the “oil and gas” policy outlined in the budget proposal yesterday was the less the process of an Obama policy process than it was the creation of green eye shade types at the Office of Management and Budget (OMB) who’ve fought oil and natural gas for years.  Apparently President Reagan’s first budget did almost the same thing.  

For today, at least, that is going to be the extent of my criticism of President Obama.  As I’ve indicated, I believe the country needs change.  Of that I have no doubt.  But this much change so fast concerns me enormously.  It risks losing rationality in the process and without that in the mix, we will have nothing to show except enormously expanded American debt.  Let me now recommend some of the better and/or most informative pieces that I encountered this morning in my journey through today’s Washington Post and New York Times. 

I think the best sources of basic information this morning on the President’s budget proposal are the “analysis” pieces that can be found in both the Post and the Times.  The Post’s piece by Dan Balz is entitled Ambitious Blueprint a Big Risk The President is Willing to Take.  The Times’ “news analysis” piece is by John Harwood and is entitled Political Skills Put to the Test.  On the opinion front, representing left, right and center, I recommend three: Climate of Change by Paul Krugman; The Obamaist Manifesto by Charles Krauthammer; and the David Brooks column referenced and linked above.

As I indicated above, I am going to withhold criticism and give Obama a chance.  There will be plenty of time to oppose, if that is what is ultimately called for, as the conceptual frameworks become blueprints become law.  

Ambitious.  That about sums up our President’s address to the nation last night.  Obama is promising the country almost everything.  The problem is, everything is pretty hard to deliver upon.  Does this mean that if we don’t end up getting “everything” that he has failed?  Might it not have been better to scale back the promises, if not the intent, and work on just a few things.  My concern here is heightened by the fact that the risks are so great.

A good “news analysis” of President Obama’s speech last night is provided by Peter Baker in the New York Times this morning.  It’s entitled In Time of Crisis, Urging Bold Action and Big Ideas.  I am personally encouraged we have a leader of the apparent caliber and self-confidence of Barack Obama, but I’m concerned that he can pull it off. 

My concerns are heightened by his ambitious energy goals.  Knowing what I know about energy I am concerned that his other goals are equally ungrounded in reality.  Obama talks about a renewable energy future but doesn’t acknowledge the critical role of the fossil present.  He talks about weaning ourselves from foreign oil but doesn’t discuss the pain it will take to get there.  When Obama promises to double our use of renewable energy that means going from 7% to 14%.  Good, but not enough to wean us from foreign oil, especially when just 7% of renewable energy goes to transportation today.  Today the country is 96% reliant on oil for transportation, the majority of that imported.  The remainder comes from natural gas (2%) and renewables (2%).  A real solution to dependence upon foreign oil will require increased domestic production of oil and natural gas.  To achieve this Obama will have to face down the liberals of his party and environmental groups and convince them that the path to both energy independence and a renewable future involves medium-term dependence on American-produced fossil fuels.  This is the reality.  The other is fantasy.  Will Obama get it right?  I have hope but significant doubts.  Our present system will make it very difficult for him to buck the environmental left on this.  If he doesn’t buck it, he cannot achieve energy independence and the country loses.  If he does buck it, he risks lose a key constituency and significant Congressional support.  Watch how this develops.  If we don’t open the offshore to significant new development we’re operating in fantasy land and Obama’s stated energy goals are likewise fantasy and will fall short.  If he does it, maybe he’s indeed got what it takes.

In the meantime we watch, and hope.   

 

In a Facebook discussion the other day, someone replied to a comment I’d made with a statement that included the following sentence.  “Liberals are, let’s face it, nicer people.”  The writer was explaining why liberals (Democrats) would make an attempt at bipartisanship now that they’re in power when Republicans never did when they had power.  It’s represents something that I’ve observed for years. 

I live in Washington, DC, which is quite a liberal place.  It’s got to rank up there with Santa Monica and Berkeley in its high ratio of liberals to conservatives.  Most of my friends are far more liberal than I.  And for years, especially when the Republicans were in control of the White House and both Houses of Congress, I heard lots about how much more dastardly Republicans were than Democrats.  While I’ll give you that Newt Gingrich as speaker got this whole era of incivility going, he merely started what has become standard operating procedure for the party in power.  No one party is all saint or all sinner.  Both play a pretty mean and incivil game these days.  It is what the parties perceive as being necessary in order to both win elections and advance their partisan agenda.  I find it disgusting and an indication that the “two-party” system no longer works.  It desperately needs to be shaken up.

Supporting my view that both parties play the same game when in power was a story in yesterday’s Politico entitled Partisan complaints come with an echo.  While the story made its basic point well, it also seemed to suggest that Democrats have been a little nicer, the story citing instances where Republicans pushed legislation through the system without minority party participation.  One example given was an energy bill in the fall of 2003.  What it doesn’t mention was that two years later a much more far reaching energy bill, the Energy Policy Act of 2005, was passed with strong bipartisan support.  In the latter bill, the committees, minority and majority, worked to produce legislation that could and did garner widespread support.  That the second energy bill was far more expansive and useful to the country speaks to its bipartisan nature.  Bills that bypass the system and are dominated by one party are going to be much more limited in what they can accomplish.

Our system will work best when there is a clear set of rules that both parties perceive to be fair and that are respected by both parties.  A process that is perceived to be fair allows for a congeniality that makes it much harder for the minority to oppose for the sake of opposition.  On the other hand, when one party attempts to shut the other party out of the game, as was largely the case when the House put together its recent stimulus package, the opposition is likely to be much more united and vocal.  President Obama has been right in trying to reach out to Republicans.  Even if ultimately rejected in this instance, he came out better in the eyes of America than did those who opposed him.  Meanwhile the U.S. House of Representatives, and both parties, came out looking bad once again in the eyes of America.  I’ve said before and I believe that President Obama’s biggest mistake with the stimulus was yielding too much control to Nancy Pelosi’s House of Representatives.  It was incapable of doing what needed to be done here, for a number of reasons.  In the future the White House has to take a much more active lead and try to keep the House under relative control.  It will be the only way that the post-partisan dream can remain alive and ultimately deliver needed legislation in the national interest.  Otherwise it will be business as usual which virtually everyone acknowledges is broken.  And no, I do not believe liberals are nicer people.  It just seems that way to liberals. 

I’m not very hopeful on the energy policy front that President Obama is going to be able to accomplish anything significantly new.  What the country needs is an aggressive “do-it-all” approach to energy.  It would be a policy in which every part of the American energy industry is encouraged to expand and grow with the overlay of needing to move the ball forward, significantly, on mitigating climate change.  But, alas, it doesn’t appear that we’ll be moving into this sphere under President Obama.  I hope I’m wrong, but the early indicators are that we’ll merely emphasize renewables, punish domestic oil and natural gas, and let imports continue to rise (assuming the economy ever rebounds) to fill the gap between what this country can produce and what it needs.

Disappointing but entirely expected from a Democrat Secretary of Interior was the recent voiding of drilling leases on public lands.  The story can be found in the Washington Post and the New York Times.  While this could just be smart politics–cancellation pending review is smart and appeases environmentalist friends–and the end result could be re-leasing much, if not all, of the withdrawn land, don’t count on it.  It would be an unlikely result from a political party so dependent upon its environmentalist constituency.  There is no question that some land needs to be held back from drilling.  We don’t need to drill every square inch of the country, but make no mistake, we need significant domestic drilling to extricate ourselves from our dependence upon foreign oil.  Most environmentalists will only be happy when we halt all domestic oil and gas operations.  It’s unrealistic, but who cares about realism.  This is environmental politics. 

What the country needs to do is encourage domestic drilling in every way it can while at the same time sending a strong signal to the economy, through a gas tax or something similar, that use of oil is very costly.  Senator Richard G. Lugar recently called for imposition of a gas tax in a revenue-neutral way “to treat our oil addiction.”  His Op-ed in the February 1 Washington Post is entitled Raise the Gas Tax.  I’ve advocated for such previously on this weblog (here and here).  It would be sound public policy that in addition to discouraging the use of oil for transportation (our biggest use of oil) would encourage conservation of energy and the growth of renewable and alternative energy.  Win, win, win.  Is it likely to happen?  No.  Politicians are loathe to do unpopular things, even if revenue neutral.

There was also a recent story indicating that green energy has taken a big hit as a result of the declining economy.  This is as tragic as discouraging domestic production of oil and natural gas.  We must do it all.  For the story on how the financial crisis is hurting wind and solar energy, and why the stimulus provisions in this regard will be helpful to the industries, see Dark Days for Green Energy from the February 4 New York Times.

It would not be hard to put together an energy policy that makes everyone happy.  The problem is that such a policy would also make some sad, for the country would have to do some things it wouldn’t do in an ideal world (drill offshore, produce more onshore oil and natural gas, burn more coal, build more nuclear plants, develop wind energy off of Cape Cod).  Doing the right thing is never easy, but it’s the path to progress. 

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