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President promises to keep his doomed vision on energy

US President Barack Obama made clear on June 15 his determination to continue emphasizing government spending and discouraging resource development in pursuit of energy-industry jobs.

He told an audience in Cleveland, Ohio, on June 15 that the fiscal plan he sent Congress in September represents “the vision I intend to pursue in my second term as President.”

The plan includes higher taxes on oil and gas and more subsidies for renewable energy.

“We have to become the global leader in renewable energy—wind and solar and the next generation of biofuels—in electric cars and energy-efficient buildings,” the president said.

Identical ambitions fostered programs now crumbling in Europe and shoving renewable sources—which, in fact, deserve a growing, supplemental role in the energy mix—toward political disrepute.

In Cleveland, Obama paid lip service to domestic energy resources, especially natural gas. Then he boasted how his plan would “end the government subsidies to oil companies that have rarely been more profitable” and said, “Let’s double down on a clean energy industry that has never been more promising.”

This formula can’t create jobs overall, as Obama persistently claims and did again in Cleveland. It would only transfer money from profitable to unprofitable activity.

The day before Obama spoke, IHS Global Insight estimated the number of jobs supported by development of unconventional natural gas resources in the US Lower 48 would rise from 1 million in 2010 to 1.4 million in 2015 and 2.4 million 2035.

This kind of employment growth can’t happen if producers sustain the tax blows Obama’s program holds in store for them under the guise of ending “subsidies.”

Furthermore, renewable energy can only suffer when a debtor government on which it depends shrinks the tax base by strangling profitable industries.

Europe indeed led the world with expensive subsidization of energy sources that need instead to find their own economic footing. The employment outcome is not appealing.

Why should the US want first position in an unwinnable race?

(Online June 15, 2012; author’s e-mail: bobt@ogjonline.com)


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