US President Barack Obama feinted toward the political center as 2010 ended, but no one in the oil and gas industry should be fooled. This president remains dangerously resistant to the development and use of hydrocarbon energy. His administration won't be discouraged by the harsh message voters delivered to it in congressional elections last November.
In December, Obama acted as though ready to move away from the leftist agenda voters rebuked in November. When he signed last-minute legislation to extend Bush-era tax cuts for all taxpayers, he disappointed his liberal supporters, who wanted to exclude taxpayers with incomes above certain thresholds. On the basis of this compromise, he received media credit for having redressed the excesses of his first 2 years in office. He then parlayed the goodwill into two legislative victories dear to liberals: repeal of the "don't ask, don't tell" policy on homosexuality in the military services and ratification of an arms-reduction treaty with Russia.
Swift recovery
The president now is said to have reclaimed political ground lost with November's rout of Democrats from Congress. If real, this swift recovery should worry the oil and gas industry. Aggressive moves by two key agencies in his administration, made in the news lull just before the Christmas holiday, show Obama has no intention of moderating his activism.
On Dec. 23, the Department of the Interior opened a new mechanism for preventing economic activity on federal land. It authorized the Bureau of Land Management to manage onshore acreage not designated by Congress as wilderness, off-limits to development, as "wild lands" to preserve "wilderness values." The move provides for the withdrawal of public land from economic use by fiat.
Interior Sec. Ken Salazar said this power grab reverses a policy established in 2003, in a settlement between Interior and Utah, that blocked expansion of wilderness acreage. That land area is slightly larger than California, about 5% of the total US. There surely remains land not designated wilderness that should be. Ultimately, though, how much land needs to be rendered untouchable? How much land can the US afford to treat this way? To these questions the environmentalist agenda answers, "As much as possible, whatever the cost." Through Interior, the Obama administration has acceded once again to extremist demands.
On the same day Interior acted on wild lands, the Environmental Protection Agency advanced its legally questionable program to control energy decisions by regulating emissions of greenhouse gases (GHGs) under the Clean Air Act. It announced a plan for proposing next year GHG standards to take effect in 2012 for fossil-energy power plants and refineries. The move followed its November decision to impose permitting requirements based on GHG emissions from large industrial sources on Jan. 2.
With the latest proposal, EPA acted under settlement agreements in lawsuits filed by states and environmental groups. It thus sidestepped normal regulatory procedures, under which the regulated industries could have commented on technical feasibility and other concerns. This maneuver made a mockery of its plans for "listening sessions" preceding the setting of standards.
Not listening
EPA apparently hasn't been listening to public expressions of reluctance to incur higher energy costs for doubtful global-warming remedies. Those expressions take form in the Senate's failure to pass cap-and-trade legislation and in the November repudiation of Obama's state-centered policy push. The agency also didn't listen to an important energy state's protests when it took over GHG permitting for refineries and power plants in Texas, deciding unilaterally that a flexible permitting program was deficient.
The Obama administration is not chastened by the setback its political party sustained in November. It is pushing ahead an aggressive environmental and energy program that lacks support outside the far-left wing of its political base and that can only hurt the economy, notwithstanding incessant prattle about mythical "clean-energy" jobs. Republicans now hold oversight reins that were out of hand before November. They need to jerk them soon and hard.
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