Oil prices are surging to levels that will soon crimp economic growth. And what's our government doing about it? Just making it worse.
Since President Obama took office in January 2009, the price of oil has rocketed 117% to $90.41 a barrel and gasoline has jumped 67% to $3.07 a gallon. In the 34 industrialized nations, oil imports have surged 34% in the last year to $790 billion. The U.S. alone has seen a $72 billion jump.
All this imperils a fragile recovery from the financial crisis. "Oil prices are entering a dangerous zone for the global economy," says Fatih Birol, chief economist at the International Energy Agency.
Given the clear threat, it's economically irrational to sit on our hands and fail to develop our own energy resources. At least 130 billion barrels of oil and trillions of cubic feet of natural gas lie offshore, and hundreds of billions of barrels more are locked in shale deposits in the Northeast and West. Yet our policy remains leaving this wealth alone.
More than mere incompetence is at work here. It's becoming more and more obvious that Obama's energy policy is meant to raise prices by making fossil fuels harder to produce and use. Indeed, the White House has followed a deliberate policy of attacking Americans' use of energy, turning it into something of a moral crusade.
In just two years, as Steve Everley of the American Solutions blog has noted, the Obama administration has:
• Virtually shut down oil drilling in the Gulf. Yes, the six-month moratorium announced during the BP oil spill ended in November. But regulators have made it nearly impossible for oil firms to restart operations and have slapped strict new rules on drilling even in shallow waters.
• Put hundreds of billions of barrels of offshore oil and gas off-limits to exploration and production. By executive order, the administration has taken much of the energy-rich Outer Continental Shelf out of play. This, according to the Energy Information Administration, will cut this year's output by 220,000 barrels a day.
• Canceled 77 existing drilling leases in Utah, one of Department of Interior Secretary Ken Salazar's first actions and a move that set the tone for the Obama administration's war on energy.
• Proposed new taxes on energy, including the cap-and-trade fiasco, that have had a chilling effect on new investment in energy. Steven Chu, Obama's energy secretary, has already let the cat out of the bag by saying he wants to see pump prices in the U.S. as high as they are in Europe. Last we checked, that was $7 a gallon.
America has the oil and natural gas resources to ensure its energy future as we develop reasonable, economically viable alternatives to fossil fuels. And that oil and gas is available right now.
Yet, our government has systematically put those resources out of reach, making us more dependent on unreliable foreign sources. Today we're more, not less, vulnerable to the predations of foreign dictators and tyrants who would do us ill.
Developing our own resources would also go a long way toward boosting the economy. A new study by consultants Wood Mackenzie reckons that 530,000 new, high-paying jobs could be created and $150 billion in government tax revenue generated over the next four years by boosting oil output by 4 million barrels a day.
Obama's war against fossil fuels is a direct assault on our oil-dependent economy and standard of living. At a minimum, the new Congress should hold hearings on these damaging policies — and overturn them if possible.
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