There seems to be a great disconnect between administration rhetoric and actual administration policy.  Here I will examine two examples, policy on outer continental shelf drilling for oil and gas, and actions on the controversial Keystone XL pipeline from Canada.

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%

The Environmental Protection Agency is promulgating new regulations regarding emissions of nitrogen dioxide, sulfur dioxide, and ozone which may greatly increase the cost of electricity, cause some power plants to close, and endanger our ability to produce adequate power.

According to Investors Business Daily:

The Cross-State Pollution Rule, announced last month, and its implementation over the next 18 months will likely result in the loss of a fifth of the nation’s electricity-generating capacity.

The rule requires [coal-fired power plants] in 27 states to slash emissions of sulfur dioxide and nitrogen dioxide by 73% and 54%, respectively, from 2005 levels by 2014.

Up to 110 gigawatts of capacity came on-line between 1940 and 1969 and were grand fathered under the Clean Air Act. Now the EPA is saying bring them up to their code or shut them down.

An analysis released earlier last month by the National Economic Research Associates used government data to examine the combined impacts of this latest rule and other EPA rules and found the EPA’s actions would cause a net job loss of more than 1.4 million job-years by 2020.

Even the New York Times says “Because of new Environmental Protection Agency rules, and some yet to be written, many of those [power] plants are expected to close in coming years.”

The Washington Times reports:

The EPA said it would soon release updated ozone regulations that are going to kill jobs and impose substantial costs on the U.S. economy – at least $90 billion, by its own estimates, and $1 trillion annually between 2020 and 2030 according to industry estimates.

The Clean Air Act requires the EPA to review standards every five years. The EPA last did so three years ago. Why the rush to imposes new stricter standards two years early? Is this political science rather than real science? According to the EPA, ozone levels have been falling since 1980 and are now just 50% of what they were then.

Sulfur dioxide, nitrogen dioxide, and ozone are associated with fine particulate matter which is regulated by the EPA.

Again from the Washington Times:

What if today’s levels of air pollution didn’t kill anybody? That certainly would be bad news for the U.S. Environmental Protection Agency (EPA), which has spent the past 15 years stubbornly defending its extraordinarily expensive and ever-tightening air-quality regulations.

The EPA claims airborne fine particulate matter kills tens of thousands annually and that the prevention of those deaths will provide society $2 trillion annually in monetized health benefits by 2020.

But we can debunk those claims with more than mere criticisms of EPA’s statistical malpractice and secret data. We have actual data that simply discredit the EPA’s claims.

Continue reading.

For the most part, current standards have been met, so the EPA is moving the goal posts. The EPA has yet to provide any solid scientific justification for these regulations. And the regulations will greatly harm our economy. But regulators tend to regulate to justify their own existence. How clean is clean enough?

For a more in-depth analysis see: Pretending Air Pollution Is Worse Than It Is from Junkscience.com.

President Obama has touted production of “green” jobs by promoting alternative energy sources to produce electricity, especially wind energy. He has particularly pointed to the experience in Spain and Denmark as examples of what could be done in the U.S.

However, the experience in those countries shows that all is not well.

A research team from Madrid’s King Juan Carlos University produced a detailed, well-sourced paper: “Study of the Effects on Employment of Public Aid to Renewable Energy Sources ,” which shows that the “green jobs” program was an economic failure.

See: http://www.juandemariana.org/pdf/090327-employment-public-aid-renewable.pdf

This study found that for every subsidized green job created, 2.2 jobs were lost elsewhere in the economy. “The study calculates that since 2000 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.

In Denmark, they produce 19% of their electricity from wind power, but to produce that 19% takes 75% of all jobs in the energy sector. A study from Denmark (http://tinyurl.com/mdfsju ) notes “that the effect of the government subsidy [to the wind industry] has been to shift employment from more productive employment in other sectors to less productive employment in the wind industry. As a consequence, Danish GDP is approximately 1.8 billion DKK ($270 million) lower than it would have been if the wind sector work force was employed elsewhere.” This study estimates that the per job subsidy for the wind industry was $90,000 to $140,000 US.

The Danish Economic Council concludes: “The wind power expansion in the 1990’s is an example of a policy that was unprofitable from society’s point of view, even taking the economic advantages that the wind business enjoyed into consideration. ” As a result, the energy sector underperformed by 13% when considered on a value-added basis compared to other industries.

If the Obama administration really wants to create jobs, perhaps they should rethink their energy policy.