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.