Friday, June 8, 2012

Obama's Energy

As the election day draws closer, U.S. President Barack Obama’s record on energy is increasingly under scrutiny with mixed conclusions. The left praiseshis record to date, as the right remains highly criticalof it. The point of contention is not just the yoyoing oil prices and the delayed Keystone XL pipeline. It is also about debate over domestic oil and gas production and Obama’s support of renewable energy. Although unconventional oil and gas production saw a major increase in recent years, leading to a creation of many jobs in the shale gas and oil sector, as well as reduction of oil imports for the first time in a long time, the American Petroleum Institute (API) insistedthat the “White House is lying to the American public when it says its policies are responsible for increased oil production.” According to API’s PresidentJack Gerard, “Obama is taking credit for policies enacted under the previous administration.”

Politics and politicization of energy aside, while the Obama administration made mistakes on some key matters, e.g. shelving Keystone XL or blowing money on Solyndra and other less than economically sensible solar projects, it did not interfere with the production of shale gas and oil that transformed the energy landscape of the U.S. It is important to remember that as much as any U.S. President would be keen to have an exclusive access to a magic red button to bring up or down oil prices, they are not – and will never be – under his or her control. It is a deliberate misrepresentation to put globally-driven high oil prices on a president of a country, unless that president is a cause of a major world event, such as war, natural disaster or depletion of oil.

At this point, nothing major in the energy sector is likely to happen before the November elections. So, the focus should be on the outlook of the U.S. energy policy that goes beyond bumper stickers of the extreme left or right. As the unconventional energy business matures, the level of regulation at the state and federal jurisdictions is likely to remain a source of contention both sides of the aisle. If Obama is re-elected, his record on energy will be further put to test, depending on how his administration regulates the shale gas and oil industry, how many drilling leases on federal lands will be issued, when onshore drilling permits will come to life, what happens with clean energy, and how the right and left will react to them. Obama’s challenge will be living up to the “all of the above” plan and providing leadership to develop an unpoliticized comprehensive energy policy for the country.

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