The economy is bouncing back, naturally, but instead of helping it to recover–or at least getting out of the way–the Obama administration seems determined to plunge us into another recession.
With economic growth returning, the fact that we have done nothing to increase our own supplies of fossil fuels once again emerges, as the price of oil climbs inexorably, putting a brake on the nascent recovery. The Financial Times headlines: “Oil could give kiss of death to recovery.”
This week oil climbed to $87 a barrel, its highest level since October 2008 and prompted concerns that triple-digit crude was once again in the offing. …
The latest surge seems to have been prompted by rising confidence in a global economic recovery, even if most traders and bankers are still cautious about supply and demand fundamentals. …
Hussein Allidina, commodity strategist at Morgan Stanley, says the $100 oil he predicts next year would increase the “oil burden” – a function of demand, prices and global output – to about 4 per cent from 2.8 per cent late last year. This would hurt developed economies more than emerging ones, as the latter are powering global growth and can afford fuel subsidies, he says. The IMF estimates consumer petroleum subsidies will reach almost $250bn this year.
So, what is our administration doing to increase our domestic energy supply? Nothing. Last week’s announcement by President Obama that he was expanding off-shore drilling was a fraud, as we noted here. Steve Everley of American Solutions adds this message to our readers:
Last week President Obama announced that he “will consider potential areas” for offshore drilling. The press immediately interpreted this to mean he was going to allow offshore drilling.
Two days later, the truth came out when the New York Times discovered the offshore drilling plan was all talk. Although Mr. Obama proposed new areas for drilling, the Times reported, “they will ‘not necessarily’ be open to oil and gas development in the next five-year drilling program that takes effect in July 2012, the Interior Department said.”
So under the best case scenario, the Department of Interior will move forward with offshore leasing in 2012. Minerals Management Service spokesman Nicholas Pardi added that it “usually takes roughly two years for drilling to begin after a lease sale,” meaning it would be 2014 before any drilling would begin.
More importantly, the President’s new plan restricts more than it opens. Prior to Mr. Obama’s announcement, the Pacific Coast, the North Atlantic, and several key areas around Alaska were open for business, including portions of the Chukchi Sea estimated to hold over 70 billion barrels of oil, or three times the proven U.S. reserves. With one speech, President Obama closed operations in these areas until at least 2017.
In the portions of the Gulf of Mexico that the President “opened,” drilling actually requires congressional approval because the Gulf of Mexico Energy Security Act of 2006 (GMESA) keeps it under moratorium until 2022. Key members of the House and Senate recently voiced their absolute opposition to offshore drilling, so the odds of overturning GMESA are about zero.
Obama’s decision to “consider” offshore drilling, which will “not necessarily” begin any time soon, is just another standard Obama speech — well received by the mainstream media, but ‘full of sound and fury, signifying nothing’.
It is an amazing feat of political deception to convince the public that a plan to restrict American energy is really a plan to allow offshore drilling.
“Political deception” is, of course, the hallmark of the Obama administration. But as the price of gasoline and heating oil edges higher, the deception is likely to wear thin.