Obama's "Real Energy" Problem

... and "What Would Romney Do?"

Justice Dakota

May 9, 2012

President Obama appears to not appreciate America's oil and natural gas industries. In fact, one could argue that President Obama seems to despise the concept of creating new jobs and new wealth for average Americans (and America in general in terms of an increase in Gross Domestic Product -- GDP) via the traditional method of gas and oil exploration, discovery, recovery, and production.

Obama rejected approval of the Keystone XL pipeline from Canada to Texas (causing our Canadian friends to conclude that China was a better business-partner than the United States in terms of energy acquisition). By the way, approval of Keystone would have created "shovel-ready" jobs in addition to sending a message to the world that North America is serious about energy autonomy.

In 2009, President Obama enthusiastically committed a minimum of $2 billion to help Brazil and its state-owned oil company, Petrobras, explore a huge offshore discovery in Brazil’s Tupi oil field in the Santos Basin. Obama told Brazilians: “We want to work with you. 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.” (I wonder why we can't develop our own reserves and sell them to Brazil?)

In a January 2008 interview with the San Francisco Chronicle, Obama attempted to explain a part of his energy policy:

"You know, when I was asked earlier about the issue of coal, uh, you know — Under my plan of a cap and trade system, electricity rates would necessarily skyrocket. Even regardless of what I say about whether coal is good or bad. Because I’m capping greenhouse gases, coal power plants, you know, natural gas, you name it — whatever the plants were, whatever the industry was, uh, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers."

Note to Self: "Keep it Simple, Stupid!"

Okay, economy and the economics of Real Energy gets complicated so let's simply wrap our heads around "Big Picture" examples: Russia, China, Brazil, India, Mexico, Venezuela, Canada, North Dakota ... etc ... every nation (and North Dakota) on Earth except for the nations of Europe and the United States -- are aggressively pursuing oil and natural gas in an attempt to improve the standard of living of their citizenry (and increase international influence and national power-status compared to competing powers. So old-school, I know ...). Those nations who are not into getting "dirty," but have attained a level of technological sophistication, tend to pursue nuclear power (France gets 70-percent of its electricity from nuclear power).


Meanwhile, in February 2012 President Obama schooled us all with his energy science: “We’re making new investments in the development of gasoline, diesel, and jet fuel that’s actually made from a plant-like substance known as algae.” Actually made from a plant-like substance? Wow! Plants can sometimes be green in color ... That's awesome! Let's all go take a nap under a tree knowing the problem is solved ...

We all know that Obama is 100-percent ideologically committed to "Green Energy." He seems to really like solar, wind, and oil made from algae (pond scum). We can presume he does not like nuclear energy because he never mentions this industry as a substitute for oil and gas.

It is safe to say that Obama does not like the two energy sectors (nuclear and oil/gas) that actually, reliably produce "Real Energy" (meaning they have a net plus in energy produced after subtracting the energy required for production -- uh, kind of like an "energy profit").

It appears as if President Obama is infatuated with energy from "alternative" and "Green" sources that have energy deficits (they have a net loss in energy produced after subtracting the energy required for production -- uh, kind of like a "budget deficit").

I smell an ideological, economic, and political pattern with Obama's world-view! Net deficits are good; net profits are bad! It is almost as if the pursuit of failure (net loss) has been glamorized, and the pursuit of success (net gain) has been demonized.

And, what do the "adults" in the oil business have to say:

In August 2011, Chevron Chief Executive John Watson said the following:

“Energy is the industry that makes all others possible. There aren’t many industries that can fairly be called indispensable, but the energy industry is surely one of them. It is absolutely essential to growth, development and prosperity for the country as a whole. Conservatively, we’re looking at a 40% growth in global energy demand over the next 25 years. Over that same period, renewable sources are going to expand rapidly, but at nowhere near the pace required to keep up with overall demand,” he said. “Most of our energy needs – roughly 80% – will continue to be met with fossil fuels."

Watson continued with this: “Far from peaking, the world’s estimated base of recoverable oil and gas is continually rising. In fact, over the past 30 years, as the peak oil theory has gained traction in some quarters, the world’s known reserves of oil and natural gas increased by roughly 130%, to 2.5 trillion barrels. We could accomplish great things if America had a rational, robust and comprehensive energy policy."

According to the "Oil-Guy," a rational energy policy: " ... would encourage alternative sources, not by mandates and subsidies, but by allowing the market to identify the best new fuels and bring them up to commercial scale.”

When an alternative fuel can (100-percent) power a jetliner to fly from Los Angeles to New York -- without the passengers having to pay more than $5,000 per ticket -- then, and only then -- will there be a legitimate substitute for oil and natural gas.

In the meantime, maybe we should hire/elect a businessman who actually understands Real Energy and market forces ! To that end, Governor Romney needs to have an "Energy Contract with America" moment where he spells out exactly how a Romney Presidency will encourage, increase, and support gas and oil exploration, discovery, recovery, and production.

A video that may sum up Obama's energy policy for America: "If I Wanted America to Fail ..."

http://www.youtube.com/watch?feature=player_embedded&v=CZ-4gnNz0vc