Energy costs up because that's Obama's policy

It's conventional wisdom in liberal Democratic precincts that gas prices in America are going up because of revolutionary uprisings throughout the Middle East. That's a convenient myth that obscures the truth about why Americans are and will be paying more at the pump and in their utility bills in the months ahead — energy prices are going up because President Obama thinks that's a good thing. He was absolutely candid on this point during a discussion with the editorial board of the San Francisco Chronicle during the 2008 presidential campaign. Not only would “utility rates necessarily skyrocket,” Obama said paying more for energy would be a good thing because “if you can't persuade the American people that yes, there is going to be some increase in electricity rates on the front end, but that over the long term, because of combinations of more efficient energy usage, changing lightbulbs, and more efficient appliance, but also technology improving how we can produce clean energy, the economy would benefit. … If we can't make that argument persuasively enough, you — you, uh, can be Lyndon Johnson, you can be the master of Washington. You're not going to get that done.”

But not even “Landslide Lyndon” could make economic reality go away. Obama wants Americans to pay more for energy now both to make more expensive alternative energy sources acceptable and to help finance their development. But there are two fatal flaws in Obama's strategy. First, the federal government has spent hundreds of billions of dollars since the Carter administration trying to encourage the development of alternative energy sources. And for just as long, the costs of energy produced from fossil fuels like oil, natural gas and coal, has declined, even as its production has become more efficient and environmentally friendly.

It is no exaggeration to say that a barrel of oil can be produced today in the United States cheaper and with less effect on the environment than even the most optimistic industry experts thought possible just a generation ago. So, it is all but impossible for alternative energy developers to generate sufficient consumer demand to grow the industry. Like Carter and others before him, Obama is trying to force by government fiat what consumers simply aren't willing or economically able to support.

The second fatal flaw is that Obama is simultaneously crippling the U.S. energy industry. In the Gulf of Mexico, for example, which previously produced a third of all U.S. oil and natural gas needs, the president has effectively shut down the industry because of the Deepwater Horizon disaster. That is a key factor in the recent increase in gas prices as well as continuing high levels of regional unemployment. But just yesterday in The Examiner, Institute for Energy Research President Thomas J. Pyle described the success of a joint effort by Exxon Mobil, Chevron, Royal Dutch Shell and Conoco-Phillips in developing a technologically state-of-the-art “oil well containment cap that is capable of operating in water up to 8,000 feet deep and collecting up to 60,000 barrels of liquids per day.” There simply is no excuse to bar U.S. companies from resuming drilling in the Gulf of Mexico or for making U.S. consumers pay more for gas or electricity.

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