White House rhetoric:

“We need to deploy American assets, innovation, and technology so that we can safely and responsibly develop more energy here at home and be a leader in the global energy economy.” – White House website.

“[T]he Obama Administration has launched the most aggressive and comprehensive reforms to offshore oil and gas regulation and oversight in U.S. history to ensure that our nation can safely and responsibly expand development of its offshore energy resources.” – White House website

The reality:

Exploring for oil and gas offshore has been an on-again, off-again circus.  The latest round is a de facto moratorium.  On November 8, 2011, the Obama administration announce a draft plan that would close exploration drilling on the outer continental shelf until 2017.

This moratorium places some of the most promising areas off limits and blocks some leases that were in progress.  This policy certainly is “aggressive” but misguided.

The Keystone XL pipeline would bring additional oil from Canada.  Canada currently supplies us with more oil than all the Persian Gulf sources combined, and this pipeline would put an additional large dent in that unstable source.

The pipeline is awaiting administration approval.  President Obama is caught between his environmentalist lobby supporters who want him to ban the pipeline, and the unions because the pipeline would create many new jobs.  President Obama has decided not to decide until after the 2012 election when he will have less need of these opposing forces.

White House rhetoric:

“As we recover from this recession, the transition to clean energy has the potential to grow our economy and create millions of jobs – but only if we accelerate that transition. Only if we seize the moment.” – President Barack Obama

The reality:

This is a green fantasy that ignores reality.  So-called clean energy or green energy, such as solar and wind generation, is actually a parasite on the economy because neither would exist without government mandates and subsidies.  Expenditures on these programs divert resources that could otherwise be spent on more economical and productive development.

One administration claim is that increased use of solar and wind generation will reduce our dependence on foreign oil imports, but this doesn’t fly because less that 1% of our electricity is produced from petroleum.

The experience in Europe should serve as a warning:

Spain spent €571,138 (Euros) to create each ‘green job’, including subsidies of more than €1 million per wind industry job.” “… the programs creating those jobs also resulted in the destruction of nearly 110,500 jobs elsewhere in the economy,” and that “each ‘green’ megawatt installed [including solar jobs] destroys 5.28 jobs on average elsewhere in the economy.” The study also estimates that between subsidies, and higher production costs, Spaniards would have to pay 31% higher electricity prices to repay the incurred debt.

The administration’s EPA is also promulgating unrealistic regulations which will harm our ability to produce energy.  For a story close to home, The San Pedro Valley News-Sun has a story which starts:

The U.S. Environmental Protection Agency is proposing new regulations that, if enacted, could cause the cost of generating electricity to go up substantially in rural areas. In some cases, the cost of implementing the infrastructure to support the regulatory changes is so prohibitive, power generation facilities may be forced to shut down entirely.

Potential regulatory changes involving the sequestering of carbon and how coal ash is used – if enacted – could impact generating stations throughout rural America, including Cochise County, said Geoff Oldfather, the communications, marketing and public relations manager for Arizona Electric Power Cooperative.  (Read the rest of the story here.)

Politics and environmental zealotry are getting in the way of sound energy policy.

UPDATE:

Canadian Prime Minister Stephen Harper said Sunday that he was looking at exporting more oil to China after the United States delayed a decision on a controversial pipeline.  Read more here.

See also:

Obama Clueless on Energy – Part 1

Obama Clueless on Energy – Part 2

Obama administration still clueless on energy

Blowing in the Wind, a look at green jobs

The myth of green jobs

Clean Coal: Boon or Boondoggle?

EIA says Clean Energy program will increase electricity costs 29%

In a new report (see here) EIA examines the proposed federal Clean Energy Standard (CES) program. CES requires electrical generation utilities to produce an increasing percentage of electricity from so-called clean sources such as hydroelectric, solar, and wind.  The stated rationale for this program is to reduce dread carbon dioxide emissions to forestall global warming.

Under CES, carbon dioxide emissions are projected to be 60% less than the reference case by 2035.  EIA projects the cost of electricity to rise 16% by 2025 and 29% by 2035 as a result of the program.  EIA projects the average household will spend $211 more per year for electricity.

EIA also projects that the cost of natural gas will rise 9.3% by 2025 and level off to an increase of 5.4% by 2035.  Non-electrical natural gas expenditures will increase 10% by 2035.

The impact of CES will vary regionally.  Those areas more dependent on fossil fuel generated electricity will experience higher electricity costs than those areas which have more nuclear and hydroelectric generation.

Real GDP will be reduced, reaching a peak reduction of 0.8% in 2024, but converging to a 0.3% reduction by 2035.  EIA also says that CES will negatively affect non-farm employment from 2015 through the mid 2020s.

The EIA does not speculate upon the effect of CES in reducing global warming.  But I can.  In my post Your Carbon Footprint doesn’t Matter , I estimate that if all U.S. carbon dioxide emissions were suddenly stopped, it could reduce global warming by 0.003°C.  If CES reduces carbon dioxide emissions by 60% (and ignoring burning of fossil fuels for transportation), the program has the theoretical possibility of reducing global warming by something like 0.001 C or less.   Will we notice the difference for all the dollars spent?