Why Do Oil and Gas Producers Disapprove of Obama?

Ken Silverstein | Jan 25, 2012


One of the most pronounced themes to emerge from President Obama’s State of the Union address is his dedication to shale gas that he says is this country’s newfound fortune. So why the disdain from oil and gas producers?

Politically, the president can’t straddle the fence. But he is able to show support for increased natural gas usage because it has wide appeal and because it would displace coal consumption. And while most environmentalists would rather see the emphasis on renewable fuels, they will nonetheless work to enact more safeguards with respect to the drilling process.

“We have a supply of natural gas that can last America nearly 100 years, and my administration will take every possible action to safely develop this energy,” Obama intoned. “Experts believe this will support more than 600,000 jobs by the end of the decade. And I’m requiring all companies that drill for gas on public lands to disclose the chemicals they use” that are blamed by some for polluting drinking water supplies.

The president goes on to point out that he is opening up more offshore areas to drilling -- a move that he had committed to make before the BP oil disaster in the Gulf of Mexico. Now that the administration has reviewed that situation and implemented new safety measures, he said that exploration can go on.

But he also jabbed the oil industry, noting that its profits are greater than ever and that it should get off of the government’s dole -- a place where it has been perched for a century. The same monies that have gone to it ought to now support innovative green technologies: “Government support is critical in helping businesses get new energy ideas off the ground.”

Oil and gas producers are disapproving, saying that the president is out to “stifle” development. They want more access to areas now off limits to development and will continue to push for the Keystone XL pipeline that would run from Canada and into Texas -- a point raised by Indiana Governor Mitch Daniels in his rebuttal. The Keystone line is “perfectly safe” and would employee thousands, he says.

Scoring Big

Natural gas production, incidentally, is sky high. The October 2011 report by the U.S. Energy Information Administration says that about 2,500 billion cubic feet of natural gas was plumbed from the earth -- the most on record.

“This is progress, but it falls far short of what we could do with greater access to domestic supplies and sounder regulatory policies,” says Jack Gerard, head of the American Petroleum Institute.  “We hope the administration will look at the numbers and do what we've been asking them to do for a long time: Work with us to produce at home even more of the oil and natural gas our nation will require.”

President Obama, of course, will not tow the industry line. Part of his re-election effort must involve shoring up his environmental supporters. To that end, the president notes that renewable energy has doubled from its relatively small base since he came to office. Thousands are employed because of it -- something that could snowball if Congress were to pass his so-called Clean Energy Standard that sets future goals for wind and solar, he says.

The president has recently scored big with the greenies, first by enacting a new mercury rule to dramatically cut those releases and second, by rejecting efforts to build the Keystone XL pipeline. Environmentalists, furthermore, laud his efforts to increase fuel efficiency standards for new cars to 54.5 miles per gallon by 2025.

“Yet (the administration) also ceded ground to polluters,” writes Frances Beinecke, president of the Natural Resource Defense Council, in her blog. “Its decisions to expand offshore drilling and postpone smog standards, for instance, will benefit dirty industries and make it harder for Americans to protect our health and resources. So our work goes on.”

For the environmental movement, that means getting the EPA to enact promised new regulations on carbon and coal ash, as well as ensuring that hydraulic fracturing does not contaminate drinking water supplies. Meantime, they are keeping up the relentless beat to build more green energy facilities.

Those are causes to which the president is sympathetic but they are not ones easily accomplished. Conciliation is key not just to earning concessions but also to broadening the political support he needs to win the presidential campaign.

EnergyBiz Insider is the Winner of the 2011 Online Column category awarded by Media Industry News, MIN. Ken Silverstein has also been named one of the Top Economics Journalists by Wall Street Economists.

Follow Ken on  www.twitter.com/ken_silverstein


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Why Do Oil and Gas Producers Disapprove of Obama?


Q.  Why Do Oil and Gas ProducersDisapprove of Obama?

A.  His reputation precedes him

 R. P. Suto

Oil and Gas support

Obama should go after oil and its huge profilts ... everyone else is paying huge prices at the pump. It's also politically smart. Oil will argue it can't be taxed because it needs that money to drill, but it is drilling right now more than it ever has. It will always make the argument it can't drill enough. It is time for oil to give up something. Obama has to support nat gas because it is cleaner than coal.

Follow Supporters and Advisers to determine what President Obama

A politician supports the causes of those who vote and contribute to their election campaign. To satisfy these supporters key advisers are appointed who reflect their views. Previous Republican Presidents have had Chief of Staffs who were Engineers – Andy Card [Civil Engineers] and Dr. John Sununu [Mechanical Engineer]. Engineers not only think analytically and logically but bring their past relationships with them.

Present Administration key advisers are mostly lawyers and/or seasoned politicians – Dr. Chu is a Particle Physicist [Nobel Grade] but not a petroleum engineer as witnessed by on-site visit during BP Oil Spill.

So in creating policy, the politician [in the case President Obama] attempts to pacify heavy industrial interest e.g. Natural Gas and re-opening GOM deep-water drilling leases. But, the Keystone XL pipeline denial could have been handled in a different fashion – create a Blue Ribbon Panel composed of Industrial and Academic Experts plus an EPA representative. Establish time-frame to lay-out an acceptable route and initiate this project.

Per Association of Equipment Manufacturers (AEM), it is time for Congress and the Administration to pass a fully-funded highway bill and not more short-term stop gap measures.We continue to see bipartisan rhetoric from both the Administration and members of Congress supporting job creation through infrastructure investment, but still no action has been taken.

AEM urged the President to reconsider his decision on the Keystone XL pipeline. On the jobs front alone, the pipeline would create more than 120,000 jobs, including more than 20,000 high-wage jobs in the construction and manufacturing industries where the unemployment rate is staggering.

Per America’s Natural Gas Alliance [ANGA],In 2010, the shale gas industry alone supported more than 600,000 American jobs, according to a recent IHS Global Insight report. This figure, which counts the broad impact through leading sectors of our economy, is expected to grow to 1.6 million by 2035. IHS also projected that the average U.S. household will enjoy an increase in annual disposable income of $926 over each of the next three years thanks to affordable natural gas.

Consider the political contributions and support of AEM and ANGA vs. Environmental Defense Fund [EDF] and other environmental groups to President Obama’s first campaign and how much is been given to his re-election campaign. Consider the lack of engineering insight within the Administration. Realizing these different interests and viewpoints will President Obama change policies and embrace industrial growth,

Richard W. Goodwin West Palm Beach FL


Don't Cry for Oil Cos


Why Do Oil and Gas Producers Disapprove of Obama? http://www.energybiz.com/article/12/01/why-do-oil-and-gas-producers-disapprove-obama&utm_medium=eNL&utm_campaign=EB_DAILY2&utm_term=Original-Member

I know you are just reporting the news but..

1.     American Oil Companies have enjoyed huge growth and wealth in the last 5 years. Stop crying about a lack of opportunity.

2.     Most of the fracking company stocks have exploded and the US Oil companies have a really good problem: they have so much work they can’t find enough people. Not sure what all the crying is about.

3.     The pipeline will be built. That’s just political babble. The Alaskan pipeline was not built in a week. Many, many years of preparation went into that project and that passed through undeveloped land (which was much easier). Wait until they start demolishing houses in the path to NOLA.

4.     All oil companies hate the words “alternative energy”.  That means lost profits for them - boo-hoo. So what, after 100+ years, it’s time to change. The oil companies have slept with the car companies (transportation being the greatest consumer of oil) for long enough. The tire companies have been sleeping with the car companies long enough too. That needs to stop. No shit they like oil.

5.     T. Boone Pickens was right all along. The US will use NG as a much greater percentage of its energy over the next 20 years.. Perhaps all oil companies should invest in the gas business. Bank on it. http://www.sacbee.com/2012/01/25/4214955/t-boone-pickens-statement-on-president.html


Time for America to stop crying and get to work. Don’t you think the Saudi’s have enough greenbacks in the bank?


Glenn Long


Need to ask yourself why a clean energy standard is needed

A Clean Energy Standard to set goals for wind and solar is basically a law that would mandate higher energy prices--something we do not need in the face of ever growing competition from countries that do not even strive very hard to remove toxic emission and particulate emission pollutants from their power plants.  There are credible arguments that countries that have gone into CESs with both feet have not actually reduced carbon emissions very much.  Whenever the wind and solar proponents claim they have eliminated X tons of CO2 emissions they are not quite telling the truth because the present PTC and cash grant subsidies the feds give these technologies have economically discouraged investment in newer, more efficient and cleaner modern power plants while tending to proliferate installation of simple cycle gas turbines which will waste quite a bit of gas while pumping lots of extra heat into the atmosphere.

The whole point of Clean Energy Standards, Renewable Portfolio Standards and such along with pushing for carbon taxes is to make fossil energy more expensive so wind and solar are competitive.  In addition to these things causing energy prices to rise, one also has to remember the costs of long distance transmission from remote wind and solar farms will add to the price of electricity.  The retention of older, lower efficiency fossil plants and proliferation of simple cycle gas turbines will mean increased cost due to carbon taxes so the President's program will triple down on the cost of electricity because wind and solar cannot be installed without backup power.  Adding 10,000MW of wind or solar does not add 10,000MW of reliable capacity to a grid without adding 10,000MW of fossil to back it up.

A CES is needed because no one in their right mind who wants reliable power at the most reasonable overall price would install wind or solar.  While once a fan of these technologies, I have done enough looking to change my mind.  Wind and solar have not been R&Dd sufficiently prior to our massive implementation.  Reliable electrical generation must come from nuclear, fossil, geothermal, and hydro--with the primary backup for wind and solar coming from fossil because it has the flexibility of output to ramp rapidly.  Hydro is a bit dubious as reliable power  since it is subject to long term weather variations.  So if a grid has a baseload of 30,000MW and a peak of 70,000MW there has to be 70,000MW of thermal generation installed (plus a little for unforeseen problems).  Wind and solar are just added capital on top of that.

Mark Wooldridge

Actions Speak Louder than Words

The industry looks at what this President and his Administration have done and have tried to do, not at what he says in speeches. "Talk is cheap!"

Douglas Elmendorf, Director of the Congressional Budget Office, on the subject of this President and budgets: "You cannot score a speech". The oil and gas producers, likewise, cannot "score" the Administration based on a campaign speech, even one labeled the "State of the Union".