The Great Destroyer

He had once laid out a similar, gradualist strategy for healthcare reform, telling a group of fellow leftists that he supported a single-payer health insurance system—that is, a government-run system—but cautioning that it might take time to lay the political groundwork for such a change.² This is sophisticated, strategic thinking from a central planner determined to bring “fundamental change” to our nation.

Obama’s support for higher gas prices reflects his statist, ideological hostility to oil. He dreams of transforming the economy into one that runs on windmills, algae, solar panels, and other forms of alternative energy, with plentiful “green-collar jobs” for all. Although oil is the essential mainstay of U.S. industry, to Obama it’s just a dirty fossil fuel that obstructs our transition into a “clean energy” economy. The more expensive and rare oil becomes, the more we will be forced to cultivate other energy sources—or so he believes.

Affecting this transition has become a fundamental goal of Obama’s presidency, with tens of billions of taxpayer dollars and countless onerous energy regulations being dedicated to the cause. But it has created political problems for Obama, since Americans don’t want higher gas prices and would rather drill for more oil in America than place our faith in windmills and algae—not to mention Middle Eastern tyrants. Nevertheless, by disguising his plans when he must and ramming them through when he can, Obama has greatly hindered U.S. oil production, setting our economy further back at a time we can least afford it.

One of the core problems of Obama’s energy policy is that alternative fuels are nowhere near ready to replace petroleum. “Green” energy sources won’t be practical for decades, if ever, and recklessly pursuing them to oil’s detriment guarantees energy scarcity, austerity, and malaise for the United States. As columnist Victor Davis Hanson wrote, “So much of this Administration’s talk about energy sounds similar to a bull session in the faculty lounge, or what we would expect from lifelong bureaucrats and public functionaries who have never experienced long commutes or struggles in the harsher, profit-driven private workplace.”³

Obama’s energy agenda is spearheaded by Energy Secretary Steven Chu, who said in 2008 that higher gas prices would be useful for coaxing Americans into energy efficient cars and for encouraging them to move closer to their workplaces. “Somehow we have to figure out how to boost the price of gasoline to levels in Europe,” Chu said, at a time when gas prices in Europe averaged $8 a gallon.⁴

Chu’s statement, issued before he became energy secretary, is not something administration officials are supposed to say in public. So Obama later declined to publicly endorse Chu’s remarks, and Chu himself, after his appointment, claimed he no longer holds that view. But the duo’s governing record speaks for itself. Under Obama and Chu, the Energy Advisory Board does not include a single executive from an oil company, nor, for that matter, from a natural gas, coal, or nuclear company, though 92 percent of the energy consumed in the United States is from these fuels. The board also lacked representatives from electrical utilities, which are the single greatest source of the nation’s power consumption, at 40 percent.⁵

Other cabinet members are working from the same playbook. As I documented in Crimes Against Liberty, Obama’s secretary of transportation, Ray LaHood, said he wanted to “coerce people out of their cars” and onto public transportation and bicycles, an utterance that prompted columnist George Will to lampoon him as the Secretary of Behavior Modification.⁶ Similarly, Secretary of the Interior Ken Salazar said in 2008, when he was a U.S. senator, that he would oppose all offshore drilling irrespective of rising gas prices, even if they were to reach $10 a gallon.⁷

Since taking office, Obama has fought a relentless battle against our own oil companies. In September 2010, the Department of the Interior issued an edict requiring oil and gas companies to permanently plug thousands of Gulf wells that had been idle for five years or more. Mark Kaiser, director of Research and Development at the Center for Energy Studies at Louisiana State University, estimated that this could cost between $1.4 billion and $3.5 billion, and that companies would lose between $6 billion and $18 billion in revenues from future production, with smaller oil producers to be hardest hit.⁸

One constant theme in Obama’s energy rhetoric is his demand that Congress raise taxes on oil companies, which he often phrases as a plea to end “subsidies” for these firms. By presenting this as a matter of simple fairness, Obama avoids discussing the damaging ramifications of such a policy. These were detailed by Democratic Congressman Dan Boren, who noted that ending the “percentage depletion” and “intangible drilling costs (IDCs)” tax incentives will drive up the costs of oil production and increase our dependence on foreign oil.

Describing the existing tax incentives as “absolutely critical for domestic oil and gas production for thousands of independent producers across the nation,” Boren said Obama “is completely uninformed about the oil and gas industry,” which “is not made up of just major companies,” but “of small independent firms ... that produce a vast majority of our domestic production.” Stunningly, Boren declared, “It is estimated that eliminating percentage depletion and IDCs for domestic independents would reduce U.S. drilling by 30-40 percent.” Boren further noted that these legal changes would not affect the major oil companies that Obama constantly flays, since they are barred by law from receiving percentage depletion.⁹

Boren’s only mistake was to assume Obama was uninformed about the consequences of his proposals. To the contrary, it appeared Obama had completely given up fighting higher gas prices when he commented in April 2011, as gas prices approached $4 a gallon, “I’m just going to be honest with you. There’s not much we can do next week or two weeks from now.”¹⁰ Most Americans believe increasing our own oil production will lower gas prices, but Obama willfully obstructs that path in favor of pouring billions into untested “clean-energy” projects that are compiling an impressive record of failure.

When a man asked Obama during an April 2011 town hall meeting about high gas prices, the president laughed and replied, “If you’re complaining about the price of gas and you’re only getting 8 miles a gallon, you know, you might want to think about a trade-in.”¹¹ There could be no better display of the president’s callous disregard of everyday Americans and their energy concerns.

On April 20, 2010, the Deepwater Horizon drilling rig exploded and caught fire some forty-two miles southeast of Venice, Louisiana, while completing the drilling process for a BP well, killing eleven workers. A few days later a second explosion occurred, and the vessel sank. Within days, officials discovered that oil was leaking from drilling pipe 5,000 feet below the surface at a rate of 1,000 barrels a day. Inside of a week, the leak caused an oil sheen and emulsified crude slick to form, covering 28,600 miles.¹²

The White House was late to comment on the oil spill, but on May 2, 2010, in one of his early remarks on the accident, Obama sounded calm and measured. “I am going to spare no effort to respond to this crisis for as long as it continues,” he announced. “And we’ll spare no resource to clean up whatever damage is caused. And while there will be time to fully investigate what happened on that rig and hold responsible parties accountable, our focus now is on a fully coordinated, relentless response effort to stop the leak and prevent more damage to the Gulf.”¹³ But in reviewing the administration’s response to the spill, one could reasonably conclude that it was more focused on exploiting the incident to punish “big oil” and hinder oil production than on clean-up and assistance efforts.

On May 27, 2010, while reporting to the nation on the oil spill—which he was now referring to, accusatorily, as the “BP oil spill”—President Obama summarily pronounced judgment on BP: “As far as I’m concerned, BP is responsible for this horrific disaster, and we will hold them fully accountable on behalf of the United States as well as the people and communities victimized by this tragedy. We will demand that they pay every dime they owe for the damage they’ve done and the painful losses they’ve caused.” It’s always important for Obama to have a villain to blame to ensure that he is blamed for nothing—and BP certainly seemed to fit the bill. After acting as its judge and jury, Obama declared that BP would be using its “unique technology and expertise” to stop the leak. “But make no mistake,” he intoned, “BP is operating at our direction. Every key decision and action they take must be approved by us in advance.”¹⁴

A few weeks before the spill, when rising gas prices had produced a public clamor to allow more oil drilling, Obama had proposed expanding offshore oil exploration. But in his remarks on May 27, he announced a dramatic policy change: he would suspend the planned exploration in the Chukchi and Beaufort seas off the coast of Alaska, cancel the pending lease sale in the Gulf of Mexico and the proposed lease sale off the coast of Virginia, suspend action on thirty-three deepwater exploratory wells being drilled in the Gulf of Mexico, and most notably, impose a six-month moratorium on the issuance of new deepwater drilling permits in the Gulf. He conceded oil production is important, but argued that “we can’t do this stuff if we don’t have confidence that we can prevent crises like this from happening again.”¹⁵

In a June address to the American people, Obama shamelessly capitalized on the spill to politicize the energy issue and stump for his proposed energy tax legislation. He also vowed to do “whatever’s necessary to help the Gulf Coast and its people recover from this tragedy,” which was insincere, since he initially refused to waive the Jones Act, a law that barred foreign ships from assisting the clean-up efforts. Thus, Belgian and other foreign companies with advanced technology were prevented from assisting for months, possibly because Obama’s union backers viewed them as competition.¹⁶

In his speech, Obama also blithely acknowledged that his six-month moratorium on deepwater drilling “creates difficulty for the people who work on these rigs.” That was quite the understatement, considering that some were estimating the ban could potentially cost 120,000 jobs and put another 46,200 jobs on hold during one of the toughest economic times in our history.¹⁷

Congressman Darrell Issa, the top Republican on the House Oversight and Government Reform Committee, issued an investigative report debunking the administration’s claim that it aggressively and competently took charge of the clean-up effort. According to the report,

Parish officials maintain that the federal government has not been in control since day one. In four separate interviews, senior-ranking Parish officials described how, until the President’s visit on May 28, 2010, BP was running the operation. According to one official, “until two weeks ago [after the President’s May 28, 2010, visit], BP was in charge and the Coast Guard looked to them for direction.” Furthermore, “Coast Guard asks BP,” not vice-versa. When specifically asked to agree or disagree with the assertion that the federal government had been in control since day one, another official firmly disagreed.¹⁸

Though the White House attributed its early silence on the spill to an initial failure to find a visible leak, official documents from the scene from Transocean officials and the Coast Guard revealed “clear and early indications of a substantial oil leak days earlier than White House accounts.” Furthermore, local officials “strongly believe the President’s call for a drilling moratorium will significantly compound the economic damage caused by the oil spill and will actually increase risk associated with future offshore drilling projects.”¹⁹ Issa concluded, “The evidence on the ground suggests that the White House has been more focused on the public relations of this crisis than with providing local officials the resources they need to deal with it.”²⁰

A later oversight report by Senator James Inhofe, ranking member of the Senate Committee on Environment and Public Works, confirmed the administration’s egregious mishandling of the oil spill response. The Committee stated,

President Obama and members of his Administration clearly failed in their responsibility to exhibit decisive leadership during the BP disaster. Instead of removing red tape, bureaucracy, and onerous regulations, the Obama administration kept them in place, and refused to exercise available legal authorities to remove impediments blocking the most effective and efficient courses of action. President Obama treated the BP disaster as if it were business as usual, rather than a crisis of national significance. The result was a federal response effort that was doomed to fail from the very beginning.²¹

Further demonstrating the administration’s fixation on public relations and its contempt for oil companies, Attorney General Eric Holder made an unprecedented announcement that there would be a criminal probe of the Gulf oil spill. “Given the extraordinary nature of what our nation is facing there, we thought it was appropriate to let the American people know that the federal government was understanding what was going on here, and that we were using the full panoply of our powers to open both a criminal investigation and a civil inquiry to ensure that the American people don’t pay a cent for the clean up,” Holder declared on CBS’ Face the Nation. In other words, because Obama and Holder wanted to impress the public that they were going all out, they decided to violate long-standing rules in the U.S. Attorneys’ Manual against making such disclosures.²²

The Washington Post editorial board strongly criticized the administration’s action which, it observed, “sent BP’s stock price tumbling.” It rejected Holder’s assertion of extraordinary circumstances, noting that just a week before, an assistant attorney had demurred to Senator Barbara Boxer’s request for a criminal investigation, saying, “Consistent with long-standing policy, we neither confirm nor deny the existence of such an investigation.” The board said that decisions to indict must be made free of political influence and that “the attorney general must take great care to avoid even the appearance of conflict. Mr. Holder may not have crossed that line in the gulf oil matter, but he has come close.”²³ For his part, Holder refused to acknowledge any culpability and, with his typical sophistry, speciously denied that his statement identified BP as the target of the criminal investigation.²⁴

Concerned about Obama’s re-election prospects, the White House quietly kicked off a new PR effort to mitigate the political backlash against its egregious mismanagement of the oil spill and its assault on the Gulf economy. It sent political and communication aides to Alabama, Mississippi, and Louisiana, as well as to the swing state of Florida, which was a particular focus of these efforts.

Predictably, White House press secretary Robert Gibbs claimed the White House had dispatched officials to the region to ensure an effective response to the spill, not to do political damage control.²⁵ Yet in the end, Louisianans, according to one poll, by a 54 to 33 percent margin, think George W. Bush did a better job handling Hurricane Katrina than Obama did addressing the Gulf oil spill.²⁶

But unlike President Bush, who rarely defended himself, Obama would not countenance such criticism. When NBC’s Brian Williams asked him whether the spill was “Obama’s Katrina,” he shot back, “That is just not accurate. We’ve got a lot more work to do, but because of the sturdiness and swiftness of the response, there’s a lot less oil hitting these shores and these beaches than anybody would have anticipated given the volume that was coming out of the BP oil well.”²⁷ Even as everyone from local fishermen to the governor of Louisiana was blasting his moratorium for crushing the local economy, in a speech at Xavier University, Obama declared that New Orleans was making a comeback under his administration—that with its “rising achievement,” it was “becoming a model for the nation.”²⁸

On June 22, U.S. District Judge Martin L. C. Feldman overturned Obama’s deepwater drilling ban, stating that the administration had failed to justify a “blanket, generic, indeed punitive moratorium.” The 5^th Circuit Court of Appeals later rejected the administration’s request to stay Feldman’s order.²⁹

Irreversibly committed to the moratorium, Obama essentially refused to accept the ruling. Interior Secretary Ken Salazar said he would issue an order to effectively reinstate the moratorium, which he insisted was “needed to protect the communities and the environment of the Gulf Coast.”³⁰ In other words, this administration would not allow a silly federal court order to interfere with its singular determination to shut down domestic oil production. It would just write a new order and dare the court to overturn that one as well.

Indeed, nothing could break the administration’s commitment to the moratorium, no matter how damaging it was. Even the departure of deepwater drilling rigs to other countries seemed inconsequential. White House adviser David Axelrod dismissively declared on Fox News Sunday, “These are rented rigs, and they go from place to place. It’s not an optimal situation, but obviously we’re dealing with the greatest environmental catastrophe of all time.... It’s been a tremendous tragedy for that region. We don’t want a repeat of it because we’re imprudent.”³¹

Yet according to industry experts, these drilling rigs are part of long-term contracts, and once they leave the area it is difficult to secure their return for years. Axelrod, in Obama fashion, deflected suggestions that the administration’s moratorium was primarily responsible for ongoing economic losses, citing instead spill-caused disruptions in fishing, tourism, and related activities. Unconvincingly, Axelrod claimed that Obama wasn’t opposed to new deepwater drilling, provided it can be done safely.³²

As promised, on July 12, notwithstanding Judge Feldman’s decision, Interior Secretary Ken Salazar effectively reinstated the moratorium on deepwater oil drilling in the Gulf, which would only allow drilling rigs to resume operating if they jumped through onerous bureaucratic hoops. The Department of the Interior didn’t even deny it was seeking to reimpose the overturned moratorium, insisting the new moratorium was a refinement of the earlier one, not a retreat from it.³³

So the moratorium continued to inflict damage. Although it ostensibly applied only to deepwater drilling, in fact the ban was accompanied by a de facto moratorium (via permit delays) on shallow-water projects, thus bringing nearly all oil exploration in the Gulf to a halt. The Louisiana Department of National Resources reported that shallow-water drilling permits in the Gulf have “dropped significantly since the federal moratorium”—only four such permits had been issued since that time. In the eleven months preceding the moratorium, an average of fourteen permits were issued per month. Noting that shallow-water drilling projects account for thousands of Louisiana jobs, the state’s governor, Bobby Jindal, warned that obstacles to shallow-water drilling could inflict damage on the local economy on top of the harm being done by the deepwater drilling moratorium.³⁴

Even Democratic operative James Carville, a Louisiana native, denounced the administration. “People here have been so let down,” he exclaimed. “The government comes in... and say[s] ... just blanket stop everything out there. And they’re killing the economy here.... People in the Interior Department that issue these things don’t have the foggiest idea about life here; they don’t have the foggiest idea what’s going on down here.... The federal government is just about to kill us ... with their regulatory tactics.”³⁵

Supporting Carville’s claims, LSU Finance professor Dr. Joe Mason released a study estimating that the effect of the six-month moratorium on offshore oil and natural gas production would result in the loss of thousands of jobs and $2.1 billion, including $500 million in wages and nearly $100 million in forfeited state tax revenues in Gulf states. Mason said, “A surprising number of jobs are among professionals—doctors and teachers who are supported by the communities whose economic base is oil and gas from the Gulf. If the communities can’t afford to pay their teachers, they are going to lose those teachers.”³⁶

Other loss estimates were more dramatic. Jack Gerard, president of the American Petroleum Institute, which represents some 400 oil and natural gas companies, estimated that “the administration’s moratorium, if continued indefinitely—or similar legislative proposals which would make the deep water unavailable or uneconomic—would cost this country 175,000 jobs every year between now and 2035, according to our latest analysis.” Gerard said that the Gulf accounts for 30 percent of our domestic oil production and 13 percent of our natural gas, with the deepwater portion alone producing 80 percent of the Gulf’s oil and 45 percent of its natural gas. The oil and natural gas industry, according to Gerard, supports 9.2 million workers and 7.5 percent of all U.S. gross domestic product, and thus even a minor decline in the industry could make a tremendous impact on the economy.³⁷

Notwithstanding the administration’s hype about the dangers of drilling, a government report revealed that as of July or August, three-quarters of the oil from the Deepwater Horizon spill had “already evaporated, dispersed, been captured or otherwise eliminated—and that much of the rest is so diluted that it does not seem to pose much additional risk of harm.” Only about 26 percent of the oil released from the BP spill was still in the water or onshore in a form that could cause problems.³⁸ So much for David Axelrod’s claim that this was “the greatest environmental catastrophe of all time.”³⁹

It later emerged, however, that the White House may have been responsible for the release of this report. Whereas the administration previously had an interest in playing up the enormity of the disaster in order to kill domestic oil production, after Obama officials came under fire for ineptly handling the cleanup, it suddenly had an interest in downplaying the spill’s effects. Dr. Bill Lehr, a National Oceanic and Atmospheric Administration scientist, told congressional investigators it was White House officials who released the information about the oil’s rapid dispersal, not scientists at NOAA. According to Lehr, the data to support that claim were not yet available nor was the peer review of the report complete. Congressman Darrell Issa commented,

This is yet another in a long line of examples where the White House’s pre-occupation with the public relations of the oil spill has superseded the realities on the ground. It is deeply troubling that White House officials apparently preempted the completion and review of a scientific study on the oil spill by NOAA scientists in order to tout conclusions that many experts believe may be deeply flawed.... This irresponsible action only adds to the perception that the Obama White House is more concerned about appearing competent than actually making sure the massive oil spill in the Gulf gets cleaned-up as quickly as possible.⁴⁰

The administration’s spinning of this report as “good” news angered the usually unflappable Louisiana Governor Bobby Jindal, who said, “It is stunning that the Obama Administration explained today that the loss of up to 12,000 Gulf Coast jobs and $1.8 billion in total spending by drilling operators due to their six-month deepwater drilling moratorium was somehow good news because it was less than expected.” He further declared, “It is even more unbelievable that an administration official testified about these anticipated job losses after admitting that the administration did not consider the economic impact of their deepwater drilling moratorium at all before implementing it.”⁴¹

But just a week after the administration released its self-serving report, the American Energy Alliance released a new study identifying 19,536 job losses from the moratorium, indicating the administration had underestimated the figure by as much as 60 percent. But it was later revealed that the administration really hadn’t underestimated the figure—before approving the moratorium, it had conducted internal studies concluding that the moratorium would cost 23,000 jobs—and yet it proceeded anyway.⁴²

Regardless of the precise numbers of jobs lost, the administration’s cavalier approval of the devastating drilling moratorium, after experts repeatedly warned it would not enhance safety, was unconscionable and indefensible.

Amidst all this failure, Obama triumphantly claimed credit when the leaking well was finally sealed. “Today,” he said, “we achieved an important milestone in our response to the BP oil spill.” In his two-paragraph statement, he conspicuously omitted words of praise or even acknowledgment for the BP oil drillers and relief workers who performed the capping and sealing. As the Los Angeles Times’ Andrew Malcolm noted, “Instead, Obama praised—actually he commended—several members of his own cabinet and administration.” He boasted, as if he had been the primary causal agent in the clean-up, “My administration will see our communities, our businesses and our fragile ecosystems through this difficult time.”⁴³

Even as Obama was crusading against domestic oil production, he was—appallingly—supporting oil production abroad. The U.S. government, via the U.S. Export-Import Bank, an independent federal agency, loaned more than $1 billion to the Mexican state oil company PEMEX in 2009 to support the company’s oil drilling in the southern Gulf of Mexico and had $1 billion more planned for 2010.⁴⁴

Similarly, on a trip to Latin America, Obama told Brazilian officials he wanted to help Brazil produce oil from newly discovered offshore sites. “We want to help with technology and support to develop these oil reserves safely, and when you’re ready to start selling, we want to be one of your best customers,” Obama declared, adding that “the United States could not be happier with the potential for a new, stable source of energy.”⁴⁵

Disgusted, Senator David Vitter exclaimed, “We have abundant energy resources off Louisiana’s coast, but this administration has virtually shut down our offshore industry and instead is using Americans’ tax dollars to support drilling off the coast of Brazil. It’s ridiculous to ignore our own resources and continue going hat-in-hand to countries like Saudi Arabia and Brazil to beg them to produce more oil.”⁴⁶

It wasn’t just ridiculous; it revealed Obama’s callousness toward American businesses and workers, his cynicism toward his professed goal of curbing oil production throughout the world, and his insincerity in claiming he wants to lower our dependence on foreign oil. As Gulf Oil CEO Joe Petrowsky said, “It seems a double standard and it seems somewhat hypocritical to a country that desperately needs jobs . . . that we’re encouraging other countries to create the jobs that we need.”⁴⁷

As if further evidence were needed of the ludicrous futility of the administration’s war on deepwater drilling, Cuba announced plans to drill five deepwater oil wells in the Gulf of Mexico between 2011 and 2013.⁴⁸

At the end of September 2010, shortly before the revised moratorium expired, the Department of the Interior unveiled complex new drilling regulations, provoking the oil industry to warn of further drilling delays. “Operators will need to comply with tougher requirements for everything from well design and cementing practices to blowout preventers and employee training,” Secretary Salazar announced. “They will also need to develop comprehensive plans to manage risks and hazards at every step of the drilling process so as to reduce the risk of human error.”⁴⁹

Karen A. Harbert, president of the U.S. Chamber of Commerce’s Institute for 21^st Century Energy, alleged that the new rules would create a de facto drilling moratorium to replace the expiring one. “The fact that BOEMRE [the administration’s offshore drilling regulator] has not considered how the new regulations will affect the industry is a chilling example of this administration’s misguided approach that will have unintended consequences such as increased imports and fewer American jobs,” she warned.⁵⁰

Indeed, while oil production from the Gulf was, as of April 2011, down more than 10 percent since Obama implemented the moratorium, our imports of foreign oil had greatly increased, pushing up gas prices and effectively increasing U.S. dependence on foreign oil by around $1.8 billion just in the fourth quarter of 2010.⁵¹ David Holt, president of the Consumer Energy Alliance in Houston, said Americans needed a message of hope rather than more economy-stifling regulations. “Instead, the timeline for this job-killing moratorium is blurred more than ever as it creates tremendous uncertainty for American consumers and those hard-working individuals whose livelihoods are tied to offshore energy activity.”⁵²

The administration was aware that its new rules would dramatically increase drilling costs and therefore destroy jobs. The Department of the Interior estimated the regulations would raise operating costs by an estimated $1.42 million for each new deepwater well drilled with a floating rig, by $170,000 for each one drilled with a platform rig, and by $90,000 for each new shallow well. Ken Salazar—indifferent to the pain he was causing—claimed the increased costs were justified because the rules would reduce the likelihood of another spill.⁵³

In rules issued by BOMRE, the administration buried a disgraceful rationalization of the negative effects of the new regulations: “Currently there is sufficient spare capacity in OPEC to offset a decrease in GOM deepwater production that could occur as a result of this rule.” Red State’s Steve Maley translated the sentence into plain English: “It’s OK if we lose domestic production capacity, because OPEC has plenty of oil.”⁵⁴

Eventually, indications arose that the administration’s politicized, ideological response to the oil spill had spawned excessive secrecy and the crass manipulation of data. A report by Oil Spill Commission staff suggested that White House officials may have blocked the release of “a more accurate and dramatic estimate” of the oil spill’s effects. The report indicated that the White House Office of Management and Budget had rejected an attempt by the National Oceanic and Atmospheric Administration to publicize some of its worst-case scenarios. “By initially underestimating the amount of oil flow and then, at the end of the summer, appearing to underestimate the amount of oil remaining in the Gulf, the federal government created the impression that it was either not fully competent to handle the spill or not fully candid with the American people about the scope of the problem,” the commission report asserted. ⁵⁵ The administration, of course, denied any wrongdoing.⁵⁶

More damning, seven experts from the National Academy of Engineers claimed the Department of the Interior had misrepresented their views in its report that recommended the offshore drilling moratorium. While the report had suggested the experts endorsed the moratorium, the experts in fact argued that a drilling ban “will not measurably reduce risk further and it will have a lasting impact on the nation’s economy which may be greater than that of the oil spill.”⁵⁷

The Department of the Interior’s inspector general found that a staff member of White House energy advisor Carol Browner had indeed edited the report’s executive summary to imply the experts endorsed the moratorium. However, the IG found the administration had not violated federal rules because it had offered a formal apology and publicly clarified the report. The Competitive Enterprise Institute, a free-market think tank, called on President Obama to fire Browner for this “manipulation of science.”⁵⁸

On October 12, the administration finally lifted the revised moratorium on deepwater oil drilling in the Gulf, with Interior Secretary Ken Salazar cynically announcing, “We’re open for business.” The effect was hardly dramatic, since oil companies had to comply with the “permitorium”—the new regulations that severely slowed the permitting process. Noting that a de facto drilling ban would remain in place, the Heritage Foundation’s Rory Cooper observed that behind the rhetoric, President Obama had completely shut down the nation’s oil drilling infrastructure, and at least 103 permits were awaiting review by BOEMRE. Experts expected the de facto ban to continue until the second half of 2011 and possibly into 2012. Notably, as of February 2011, the administration hadn’t approved a single new exploratory drilling plan in the Gulf since Obama had supposedly lifted the ban.⁵⁹

In fact, in December the Obama administration revoked its promise to expand offshore oil exploration into the eastern Gulf of Mexico and along the Atlantic coast. Using the Gulf oil spill as an excuse, Salazar approved an official moratorium on exploration in those areas for at least seven years. As the New York Times commented, “The move puts off limits millions of acres of the Outer Continental Shelf that hold potentially billions of barrels of oil and trillions of cubic feet of natural gas.”⁶⁰

Jack Gerard of the American Petroleum Institute warned the decision could result in the loss of tens of thousands of jobs, billions in government revenues, and greater dependence on foreign energy. Others noted that the policy would have negative rippling effects throughout the economy.⁶¹ The seven-year moratorium, according to University of Illinois professor John W. Kindt, “is a ridiculous decision” that would devastate businesses.

Some found a deeper, unsettling problem. “The real issue,” said Gerard, “is the Interior Department, which is the most scandal-ridden agency in American history. Along with an inability to regulate, the entire department is rife with conflicts of interest.” Kindt agreed, noting that the administration was just as culpable for the gulf disaster as BP but has avoided public scrutiny. “The regulators at Interior didn’t just have a cozy relationship with the people they’re supposed to be regulating,” said Kindt, “they had outright conflicts of interest.”⁶² The administration’s excuse was that it was “adjusting [its] strategy in areas where there are no active leases” to “focus and expand [its] critical resources on areas that are currently active.”

It seemed that instead of finding innovative ways to allow the industry to compensate for lost revenues and jobs from the Gulf spill, the administration was capitalizing on hyped-up environmental hysteria over it to further smother the industry. Rory Cooper reported that with all the reductions in drilling, the Energy Information Administration estimated that the government would lose $3.7 million in revenue per day from foregone royalties, amounting to $1.35 billion in 2011 alone. According to the U.S. Chamber of Commerce’s Karen Harbert, “The Administration is sending a message to America’s oil and gas industry: take your capital, technology, and jobs somewhere else.”⁶³

Unsurprisingly, amidst all these moratoriums and regulations, energy companies such as Seahawk Drilling of Houston began going out of business. “The decision by regulators to arbitrarily construct unnecessary barriers to obtaining permits they had traditionally authorized has had an adverse impact not only on Seahawk, but on the sector as a whole,” former Seahawk CEO Randy Stilley said.⁶⁴ In addition, Reuters reported that many of the more than thirty deepwater rigs in the Gulf, each of which employs some 200 people, had “moved to other markets, first because of a U.S. halt last May after BP Plc’s well blowout, and then because of the lack of permits once the moratorium was lifted.”⁶⁵

Sure enough, more than two months after the administration had nominally lifted its ban on deepwater drilling in the Gulf of Mexico, oil companies were still stymied from obtaining drilling permits. Even former president Bill Clinton called the drilling permit delays “ridiculous” at a time when the economy was struggling to rebuild.⁶⁶

In March 2011, Obama reacted to the criticism in his usual manner, indignantly blaming the oil companies for their own lack of drilling. In a press conference, he suggested that the industry holds leases on tens of millions of acres that “aren’t producing a thing” and announced that he had directed the Department of the Interior to investigate and report back to him so “we can encourage companies to develop the leases they hold and produce American energy.” With amazing chutzpah he added, “People deserve to know that the energy they depend on is being developed in a timely manner.” As Investors Business Daily observed, Obama was arguing that the companies were foregoing drilling and profit-making for no discernible reason. “It’s a bizarro-world inversion of the usual complaint against oil companies—that they are reckless and all-too eager to despoil pristine lands in search of black gold.”⁶⁷

After greatly contributing to rising gas prices through his systematic assault on domestic energy, Obama, in June 2011, decided to release 30 million barrels of oil from U.S. emergency stockpiles—the Strategic Petroleum Reserve—to bolster the economy. It was striking how casually Obama chose to designate a non-emergency as an emergency to release just a few days’ worth of the nation’s total oil and petroleum consumption. ⁶⁸ Treasury Secretary Timothy Geithner denied the decision was a political move, claiming it was designed to meet a shortfall caused by the crisis in Libya and other unrest in the Middle East.⁶⁹ In little more than a week it was clear that the move had no appreciable, lasting impact, for oil prices quickly climbed back to their previous levels.⁷⁰

Detailing the permitting hold-ups, the study found that in the six months following the lifting of the moratorium in October 2010, there was a 250 percent increase in the backlog of deepwater plans pending government approval, an 86 percent drop in the pace of regulatory approvals for plans, a 60 percent drop in all Gulf of Mexico drilling permits, and a 38 percent increase in the time required to reach each regulatory approval.⁷¹ James Diffey, senior director of IHS Global Insight’s U.S. Regional Economic Group, said the study found that “an increase in oil and gas activity reverberates throughout the broader economy. Each new hire (in the Gulf) results, on average, in more than three additional jobs in an array of industries around the country”—not just in the Gulf region.⁷²

A separate study by Quest Offshore Resources concluded that if the administration had really lifted its moratorium in October 2010, 190,000 more jobs, including 8,500 in California alone, would have been created in the United States over three years. The upshot of these avoidable delays was hundreds of thousands of lost jobs, billions of dollars of foregone federal and state tax revenues, and an increased dependence on foreign energy.⁷³

Providing further proof of Obama’s drilling obstructionism, Greater New Orleans Inc. reported in November 2011 that the administration had approved only 35 percent of the drilling plans for the Gulf of Mexico so far in 2011, and that it took an average of almost four months to get approval from BOEMRE. In previous years the approval rate had been 73.4 percent, more than double Obama’s record, and the approval time had historically averaged sixty-one days, almost twice as fast.⁷⁴ Equally troubling, these lags were damaging beyond Louisiana, because one deepwater rig alone can create 700 local jobs. As Heritage’s energy expert Nick Loris wrote, “Allowing access for exploration and creating an efficient regulatory process that allows energy projects to move forward in a timely manner will not only increase revenue through more royalties, leases and rent. It will also create jobs and help lower energy prices in the process.”⁷⁵

In January 2012, a report commissioned by the American Petroleum Institute concluded that the combined effect of the administration’s moratorium and “permitorium” could cost the United States more than $24 billion in lost oil and natural gas investment in the next several years. As a result of these delays, the study found, capital and operating expenditures fell over the two preceding years by $18.3 billion. The region was responsible for about 6 percent of global investments in crude oil and natural gas, but it would have been nearly 12 percent for 2011 had the delays not been imposed. The report stated, “As a result of decreases in investment due to the moratorium, total U.S. employment is estimated to have been reduced by 72,000 jobs in 2010 and approximately 90,000 jobs in 2011.”⁷⁶

Ken Salazar fights the administration’s war on oil far beyond the Gulf. After issuing his revised offshore drilling moratorium in July 2010, Salazar scrapped seventy-seven oil lease sales in Utah approved by the Bush administration. Though the inspector general had found no evidence to support Salazar’s claims that the Bush administration had rushed the sales, Salazar said he wanted to take a “fresh look” at the parcels before deciding whether to release them.⁷⁷

In fact, these leases had not been approved casually, but after some seven years of scrutiny and debate. This is part of a larger pattern of the federal government blocking energy leases that have been the subject of environmental protests, despite the nation’s current economic difficulties. The federal government at the time was reportedly holding $100 million for energy leases in the Rocky Mountains that have been delayed.⁷⁸ As if this weren’t enough, Investors Business Daily reported that Salazar also blocked the leases of oil shale rights in five Western states “estimated to hold between 1 trillion and 2 trillion barrels of recoverable oil.” The Energy Department’s Argonne National Laboratory says that 800 billion of these are recoverable with current technology. In addition, a 2008 Utah Mining Association report states that the West’s oil shale gives America the “potential to be completely energy self-sufficient with no demands on external resources.” As the IBD editors noted, “If we could drill in places like that, maybe oil wouldn’t be gushing a mile under the Gulf of Mexico.”⁷⁹

The campaign against drilling also reached Ohio, where Obama’s Department of Agriculture decided to delay shale gas drilling for up to six months by cancelling a mineral lease auction for Wayne National Forest, a move that could cost up to 200,000 jobs and impede access to affordable energy. The delay was sought by environmentalists who ideologically oppose the process of hydraulic fracturing, known as “fracking.”⁸⁰

This process involves injecting high-pressure fluids to fracture the porous shale rock, enabling the extraction of the oil and gas trapped inside. Environmental activists claim fracking uses chemical additives that contaminate groundwater. This is a dubious assertion, since the shale formations used in fracking are thousands of feet deeper than the drinking water aquifers they allegedly contaminate and are separated from them by solid rock. As EPA chief Lisa Jackson admitted to a House Oversight Committee, “I’m not aware of any proven case where the fracking process itself has affected water.”⁸¹ Even in cases where problems arose from gas extraction during fracking, they were not due to the fracking process, but to drilling operations that weren’t performed correctly, according to a study by the Energy Institute at the University of Texas at Austin.⁸²

Nevertheless, the Obama administration is erecting regulatory impediments to fracking, apparently unconcerned that they risk destroying the economic boom fracking has brought to parts of Ohio, North Dakota, Pennsylvania, and elsewhere. The Ohio Oil and Gas Energy Education Program estimated that drilling in the Utica Shale, which would be suspended, would produce up to 204,500 jobs by 2015—though the USDA estimated the delay would only affect up to 200 jobs. House Natural Resources Committee chairman Doc Hastings remarked, “The President’s plan is to simply say ‘no’ to new energy production. It’s a plan that is sending American jobs overseas, forfeiting new revenue, and denying access to American energy that would lessen our dependence on hostile Middle Eastern oil.”⁸³

Interestingly, while Obama vigorously fights fracking, he still boasts that his beloved government was instrumental in developing fracking technology, which he believes bolsters his case for government support for new energy projects. In fact, according to Nicolas Loris of the Heritage Foundation, this is just another of Obama’s whoppers, because long before the government became involved, the private sector established the process.⁸⁴ Inaccurate or not, President Obama better be careful not to boast too much, for his perpetual gaffe-making vice president, Joe Biden, recently warned that fracking causes earthquakes.⁸⁵

According to the New York Times, this was just one in a series of administration decisions to push back difficult environmental issues past the November 2012 presidential election. The Times pointed to similar delays in reviewing the nation’s smog standards, in conducting offshore oil lease sales in the Arctic, and in issuing new regulations for coal ash power plants.⁸⁶

Even though the pipeline would decrease America’s foreign energy dependence, create thousands of jobs at a time when 14 million Americans were unemployed, and generate a projected $5.2 billion in property tax revenues for the states the pipeline traversed—Montana, South Dakota, Kansas, Oklahoma, Nebraska, and Texas⁸⁷—Obama yielded to environmental activists who threatened to withdraw their support for his re-election.

Obama seemed unconcerned by a warning from Canadian Prime Minister Stephen Harper that delaying the pipeline’s approval would force Canada to ship its oil to Asia instead of to the U.S. “This highlights why Canada must increase its efforts to ensure it can supply its energy outside the U.S. and into Asia in particular,” Harper had said, referring to the prospect of Obama delaying approval. “Canada will step up its efforts in that regard and I communicated that clearly to the president.”⁸⁸

Just as he has tried to distance himself from controversial actions of his Justice Department, the EPA, and other agencies, Obama pretended that the delay was a purely administrative matter within the State Department. “I support the State Department’s announcement today regarding the need to seek additional information about the Keystone XL pipeline proposal,” he declared.⁸⁹

However, this was obviously a political decision coming straight from the top, as the State Department itself had found that the pipeline would not pose substantial environmental risks.⁹⁰ In fact, Obama personally intervened in a Senate fight over the pipeline, lobbying Democrats to reject an amendment calling for its construction.⁹¹ Jack N. Gerard, president of the American Petroleum Institute, said Obama’s decision was “all about politics and keeping a radical constituency, opposed to any and all oil and gas development, in the president’s camp in 2012. Whether it will help the president retain his job is unclear but it will cost thousands of shovel-ready opportunities for American workers.”⁹²

Obama’s stated concern about the pipeline’s environmental impact was sorely misplaced. Indeed, there are already 50,000 miles of oil pipeline in the United States that provide enormous economic benefits with very little environmental damage.⁹³ Moreover, as the Heritage Foundation’s David Kreutzer observed, blocking the pipeline will actually increase the risk of environmental damage. As Kruetzer wrote,

Let’s acknowledge that blocking the XL pipeline won’t stop development of the oil sands. It will slow some of the development, which will increase the world price of petroleum. However, the major impact of blocking the pipeline would be a significant diversion of the oil to non-U.S. consumers.... [Canadian oil will travel] an extra 6,000 miles across the Pacific in oil-consuming super tankers and then [be refined] in less-regulated Chinese refineries. In addition, be aware that replacing the Canadian oil means the U.S. also must import more oil by tankers, which are less efficient than pipelines.⁹⁴

But others focused on the economic costs of Obama’s decision. The Heritage Foundation’s Nicolas Loris argued that the delay was blocking new oil imports from Canada and preventing the creation of thousands of private-sector jobs. “Building the pipeline,” said Loris, “would directly create 20,000 truly shovel-ready jobs; the Canadian Energy Research Institute estimates that current pipeline operations and the addition of the Keystone XL pipeline would create 179,000 American jobs by 2035.”⁹⁶ In a bizarre attempt to deflect these kinds of charges, Obama declared, “However many jobs might be generated by a Keystone pipeline, they’re going to be a lot fewer than the jobs that are created by extending the payroll tax cut and extending unemployment insurance.”⁹⁷

Despite his view of the payroll tax cut and unemployment insurance as crucial tools for job creation, he threatened to veto a bill including these measures, as well as others he favored, if the Keystone pipeline were included in the legislation. In his imperious style he threatened, “My warning is not just specific to Keystone. Efforts to tie a whole bunch of other issues to something that they should be doing anyway will be rejected by me.”⁹⁸

Outraged by the needless delay, Congress passed a bill forcing Obama to decide on Keystone XL. He knew the American people overwhelmingly supported the pipeline, but in the end, still afraid of alienating his left-wing base, Obama rejected the project. The economic consequences of his decision are still playing out, and in fact, had kicked in with his original decision to delay a decision. Welspun Tubular Company, a steel pipe manufacturer in Little Rock, Arkansas, which had 500 miles of pipe waiting to be shipped out for Keystone XL, laid off sixty employees after the delay was announced.⁹⁹ Obama’s decision was obviously wrongheaded, and editorial pages across the nation criticized it.¹⁰⁰

Obama’s opposition to oil drilling, fracking, and other domestic energy production comes at great cost to the American economy. Wood Mackenzie, an energy research firm, issued a report in September 2011 finding that the development of new and existing resources could increase domestic oil and natural gas production by the equivalent of over 10 million barrels of oil per day, support an additional 1.4 million jobs, and raise more than $800 billion of cumulative government revenue by 2030. By contrast, continuing on the current path of policies that delay lease and drilling permits, increase the cost of hydraulic fracturing, and delay the construction of pipelines such as Keystone XL will detrimentally impact production, jobs, and government revenues.¹⁰¹

As for the first claim, non-partisan energy observers say Obama does not deserve credit for increased domestic energy production. Any increase in domestic drilling during his tenure has been almost entirely in areas over which the Obama administration exercises no authority. According to a study by the Institute on Energy Research (IER), oil production on federal land—over which the president has control—declined by 11 percent in fiscal year 2011, while oil production on state lands increased that year by 14 percent, and on private lands by 12 percent. “A lot of the wells that were supposed to be drilled weren’t because of the moratorium,” says the IER’s Dan Kish. “Drilling is up in the U.S. on lands he has no say over. On lands he has all the say over, drilling is down.”¹⁰²

According to another analysis—by the Heritage Foundation—oil and gas production on federal land is down by 40 percent under Obama’s presidency. In fact, in 2010, there were fewer onshore leases than during any year since 1984, and the administration held only one offshore lease sale in 2011.¹⁰³ The vast majority of today’s oil production—for which Obama disingenuously claims credit—occurs on private land in North Dakota, Texas, and Alaska. Indeed, in North Dakota, oil production is booming and unemployment is at 3.1 percent—the lowest rate in the nation.¹⁰⁴

Additionally, regardless of what statistics Obama cites, experts, including EIA Administrator Richard Newell, say it takes around one to three years for any major federal policy action concerning oil production—such as issuing leases—to affect domestic oil production. Oil production was significantly higher in 2009 than in prior years, and while Obama was in office for most of that year, most of the production increase was due to action during the Bush years. The same is true for 2010.¹⁰⁵

Obama’s real attitude toward oil drilling was seen in August 2011, when a federal judge threw out administration rules that were slowing down expedited environmental review of oil and gas drilling on federal land. Ruling in favor of Western Energy Alliance against the federal government and Interior Secretary Ken Salazar, U.S District Judge Nancy Freudenthal reinstated the Bush-era rules that expedited these reviews. After the ruling, a defiant government attorney complained that the judge “completely discounted the government’s argument that the harm was speculative.”¹⁰⁶ Here, we see the cavalier attitude of this administration, decidedly at war with the industry and apparently unconcerned with the damage its policies were causing to the industry, to American workers, and to the American economy overall, as it implemented its reckless policies and then demanded the injured parties substantiate the damages beyond the level that satisfied the court. This is not the way a government of, for, and by the people is supposed to work.

Concerning his over-consumption claim, Obama argues, “Even if we drilled every drop of oil out of every single one of the reserves that we possess—offshore and onshore—it still wouldn’t be enough to meet our long-term needs. We consume about 25 percent of the world’s oil. We only have 2 percent of the reserves. Even if we doubled U.S. oil production, we’re still really short.”¹⁰⁷

The United States has some 20 billion barrels of oil in reserves; “reserves” refers to “proven” reserves that are certain to be recoverable in future years from known reservoirs under existing economic and operating conditions. That is, we have 20 billion barrels that are recoverable at current prices and under lands currently available for development.¹⁰⁸

That definition would exclude many oil reserves that Obama has declared off-limits. According to the Institute for Energy Research, we have more than 1.4 trillion barrels of oil that are technically recoverable in the United States with existing technology. The largest deposits are located offshore, in portions of Alaska and in shale deposits in the Rocky Mountain West. This means the United States has more recoverable oil than the rest of the world combined, outside of North America. The Heritage Foundation says this is enough to fuel every passenger car in the nation for 430 years. Therefore, “it is merely semantics—not a scientific assessment of what America has the capacity to produce—that allows critics to claim repeatedly that America is running out of energy.”¹⁰⁹

When you add in recoverable resources from Canada and Mexico, the total recoverable oil in North America exceeds 1.7 trillion barrels. “To put this in context, Saudi Arabia has about 260 billion barrels of oil in proved reserves.”¹¹⁰

Even by the restrictive definition of reserves Obama is using, the 20 billion barrels figure is misleading, because he is clearly implying it is a fixed, or static, number—as though with every barrel of oil we consume, we are approaching our last available barrel. In fact, the number is not static, but is constantly changing.

The Institute tells us that in 1980, for example, the United States had 30 billion barrels of oil in reserves. But over the next thirty years—through 2010—we produced 77 billion barrels.¹¹¹ Now, how can it be that we produced two and a half times more oil than we had available, consumed a great deal, and still ended up with plenty left over?

Obama’s own Energy Information Administration is predicting a steady increase in reserves on land currently available for exploration. Heritage’s David Kreutzer says, “It projects that improvements in technology and the economics of extraction, production, and sales actually will lead to a 23.7 percent increase in U.S. reserves even after extracting billions of barrels of oil in the interim.”

Further, Obama’s formulation conflates two different measures. We might have only between 2 and 3 percent of the world’s recoverable reserves, as narrowly and misleadingly defined, but we don’t consume 25 percent of the world’s oil reserves, which is what Obama wants us to believe. We consume closer to 22 percent—but it’s not of reserves, it’s of the world’s oil production. And, as Heritage notes, “we consume about 22 percent of the world’s production of everything,” not just oil. Consumption is determined by income, not by available resources, and we also produce about 22 percent of the world’s total output of all goods and services. Admittedly, we don’t produce 22 percent of the world’s total oil output; more like 6 to 10 percent. But experts say this number will increase in the future even without accessing the other abundant sources mentioned above.¹¹²

President Obama’s war on oil is doing incredible damage to America, costing jobs, depressing economic growth, and hindering our national security by keeping us dependent on oil from Saudi Arabia, Venezuela, and other repugnant regimes. He claims to support more drilling alongside “green energy,” but don’t believe him—through all his rhetorical attacks on oil companies, through all his moratoriums and damaging regulations, through all his resistance to Keystone XL and fracking, it’s clear that he views oil as an obstacle, not a complement, to his alternative energy schemes. By developing more of our own, bountiful supply of oil, we could lower unemployment, reduce gas prices, create more government revenues to help balance the budget, and reduce our dependence on foreign oil. But Obama has different priorities; instead of producing more oil, he wants to reduce and—in his utopian fantasies—ultimately eliminate it.

BOOSTING PRICES TO EUROPE’S LEVELS

“COMPLETELY UNINFORMED ABOUT THE OIL AND GAS INDUSTRY”

“A FEDERAL RESPONSE EFFORT DOOMED TO FAIL”

HOLDER “HAS COME CLOSE” TO CROSSING THE LINE

THEY “DON’T HAVE THE FOGGIEST IDEA WHAT’S GOING ON DOWN HERE”

8,000-12,000 JOB LOSSES: GOOD NEWS!

“ENCOURAGING OTHER COUNTRIES TO CREATE THE JOBS THAT WE NEED”

“A CHILLING EXAMPLE OF THIS ADMINISTRATION’S MISGUIDED APPROACH”

MANIPULATING SCIENCE

A MINIMUM SEVEN-YEAR BAN

“HUNDREDS OF THOUSANDS OF LOST JOBS”

OTHER ASSAULTS ON DRILLING

“MY WARNING IS NOT JUST SPECIFIC TO KEYSTONE”

OBAMA’S TWO FAVORITE ENERGY LIES