USA Today may think that “President Obama’s attempt to use the Gulf of Mexico oil spill to help propel comprehensive energy legislation has failed,” but Conn Carroll of the Heritage Foundation doesn’t believe it for a second.
After Federal Courts twice invalidated the president’s moratorium on deepwater drilling in the Gulf of Mexico, describing it as “arbitrary and capricious,” his administration reissued a similar, if not more restrictive ban last Monday. Majority Leader Harry Reid is meanwhile expected to introduce a bill in the Senate soon that will cap greenhouse gas emissions from power plants. “Taken together,” writes Carroll, “the president’s Cap and Ban approach to energy policy will accomplish exactly what he set out to do from the very first day he was sworn into office: decrease the amount of carbon the US economy emits by drastically increasing the cost of energy.”
Senator Reid’s scheme would reduce the carbon American power plants emit by forcing them to produce more and more renewable energy with each passing year. “This is essentially cap and trade but without the trade,” notes Carroll.
“If these new renewable energy sources were actually cost effective,” he writes, “there would be no need to mandate them.” After all, companies, looking after their own interest, seeking to bring down costs and maximize profits, would readily exploit renewable energies if they could make money from it. But they can’t. Wind and solar power are far more expensive than traditional fuels. Mandating energy companies to increasingly make use of such methods nonetheless will inevitably drive prices up. “The ultimate victim of these higher energy prices will be you the consumer and the American economy,” according to Carroll.
Taking the full cost of renewable energies into account, the Heritage Foundation’s Center for Data Analysis found that such a policy would:
1) raise electricity prices by 36 percent for households and 60 percent for industry; 2) cut national income (GDP) by $5.2 trillion between 2012 and 2035; 3) cut national income by $2,400 per year for a family of four; 4) reduce employment by more than 1,000,000 jobs; and 5) add more than $10,000 to a family of four’s share of the national debt by 2035.
“And that is just the ‘cap’ half of President Obama’s Cap and Ban approach,” notes Carroll. The drilling moratorium in the Gulf of Mexico is already causing enormous damage to the local enemy. More than 200,000 jobs are dependent on offshore drilling in the region while 35,000 workers are directly involved each day when the rigs are in use. The American Petroleum Institute forecasts that if the drilling ban remains in place, more than 120,000 jobs may be lost in the Gulf area as companies move out. The people whose lives haven’t been wrecked yet by the spill have their livelihoods threatened because of this irrational, arbitrary policy, unlawfully enacted by the White House.
Heritage analyst David Kreutzer has crunched the numbers and found that a full Obama Administration ban on all offshore drilling would be absolutely devastating to the US economy. Between now and 2035, an offshore drilling ban would: 1) reduce GDP by $5.5 trillion; 2) reduce job growth by more than 1 million jobs by 2015 and more than 1.5 million jobs by 2030; and 3) increase the total expenditures for imported oil by nearly $737 billion.
Meanwhile, there are vast reserves of oil and natural gas waiting to be exploited underneath the Atlantic coastline, beneath the northern coast of Alaska, and on land, in Colorado and Wyoming. Combined, these regions hold over two hundred billion barrels of oil and two thousand trillion cubic feet of natural gas that are recoverable with today’s technology. That’s more than most OPEC nations. If fully developed, it would be enough to free America from the import of foreign oil for almost fifty years.
Yet, according to the president, “drilling alone cannot come close to meeting our long term energy needs.” Instead, his administration is set to subsidize currently unprofitable renewable energies, stifling necessary progress in these sectors at the expense of millions of Americans who will either lose their jobs, see their energy bills go up, or both.