SOTU: Obama to stick with ‘all-of-the-above’ energy strategy

US President Barack Obama quickly cited the US oil and gas renaissance for helping the nation’s economy recover in the last 5 years, and said in his fifth State of the Union address that natural gas will need to play an even bigger part in the future.

“One of the biggest factors in bringing more jobs back is our commitment to American energy,” Obama said in his Jan. 28 address to Congress and the nation. “The all-of-the-above energy strategy I announced a few years ago is working, and today, America is closer to energy independence than we’ve been in decades.”

Gas is one of the reasons why, he continued. “Businesses plan to invest almost $100 billion in new factories that use gas,” the president said. “I’ll cut red tape to help states get those factories built, and this Congress can help by putting people to work building fueling stations that shift more cars and trucks from foreign oil to American natural gas.”

He said his administration would keep working with the industry to sustain production and job growth while strengthening protection of air, water, and communities. “And while we’re at it, I’ll use my authority to protect more of our pristine federal lands for future generations,” Obama said.

US energy leadership extends to solar power, according to the president, where “every 4 min another American home or business goes solar, every panel pounded into place by a worker whose job can’t be outsourced.”

He said, “Let’s continue that progress with a smarter tax policy that stops giving $4 billion/year to fossil fuel industries that don’t need it, so that we can invest more in fuels of the future that do.”

Mixed response

Oil and gas association leaders welcomed the president’s endorsement of more US gas production and deployment, but criticized his suggestion that federal tax provisions producers consider essential be repealed to encourage more development of solar power and other alternatives.

“It is clear from tonight’s speech that the president recognizes the role gas is playing in meeting our nation’s economic and environmental needs,” said Martin J. Durbin, president of America’s Natural Gas Alliance. “As the president mentioned, there is great promise for gas in our transportation sector as trucks, trains, and cargo ships transition to this clean and abundant fuel. The 1.4 million well-paying jobs that gas development will support in 2015 can help narrow America’s income inequality.”

American Petroleum Institute Pres. Jack N. Gerard noted the oil and gas renaissance gives the US a unique opportunity to revitalize its economy and become a global energy superpower while helping Americans get back to work. “The president has the opportunity to seize this moment by approving the Keystone XL pipeline, opening up new areas for responsible energy development, and pulling back unnecessary and costly new regulations,” he said.

“Unfortunately, the president called for increased taxes on the oil and gas industry he needs to close the income gap and create jobs,” Gerard said, adding, “Punishing energy companies by raising taxes is not sound energy policy and could lead to less energy, less government revenue, and fewer jobs.”

Obama continued to take credit for higher US oil and gas production when almost all of the increase took place on private and state—but not federal—lands, National Ocean Industries Association Pres. Randall B. Luthi observed.

Sees inconsistencies

“The president spoke again about the need for more jobs,” Luthi said following Obama’s address. “Yet his administration continues to block expanded domestic offshore energy production on the 85% of the US Outer Continental Shelf that remains off-limits for political reasons, even though developing those areas would usher in an economic renaissance, generating tens of thousands of new jobs and billions of dollars in new revenue to federal and state governments.”

Luthi, who was US Minerals Management Service director during US President George W. Bush’s second term, said he thought it also was inconsistent for Obama to promise he would help states cut red tape so more manufacturing plants can be built while committing himself to prevent more energy development on public lands.

Environmental organizations’ responses to Obama’s address also were mixed. His all-of-the-above energy policy is simply “drill, baby, drill” by another name, Earthworks Executive Director Jennifer Krill said prior to the address. “There is yet hope for President Obama’s vision of a clean energy future, if he turns away from the oil and gas industry and towards truly renewable energy,” she maintained.

But Jamie Williams, president of The Wilderness Society, said following the speech that he was excited to hear Obama commit himself to protect more American cultural and scenic treasures, and urged the president to be ready to use the Antiquities Act to set aside more public land as national monuments.

Obama said the US has reduced its carbon pollution in the last 8 years more than any other country, but needs to do more. “The debate is settled,” he declared. “Climate change is a fact. And when our children’s children look us in the eye and ask if we did all we could to leave them a safer, more stable world, with new sources of energy, I want us to be able to say yes, we did.”

Contact Nick Snow at nicks@pennwell.com.

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