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review is smart and appeases environmentalist friends–and the end result could be re-leasing much, if not all, of the withdrawn land, don’t count on it.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.