April 2002: Drilling in ANWR Would Take 10 Years to Produce: The Consequences of Inaction

Senate Republicans have release the following video noting Senate floor discussion from ten years ago this week when Democrats were claiming that we can't drill in ANWR because it would take 10 years for the oil to be produced (H/T the Heritage Foundation):

Here we are ten years later, and ANWR is still closed to production, yet the obstruction of liberals who would rather invest taxpayer dollars in solar companies that inevitably fail than reap the tax revenue from a proven source of energy that would also create jobs and provide economic and national security. ANWR is overwhelmingly abundant with both oil and natural gas. ANWR has the potential to produce 1 million barrels of oil a day, which would replace the amount that we import from Iraq. It is slightly larger than the state of Delaware, but would leave a footprint roughly equivalent to LAX (2000 acres). In other words, less than 0.5% of the geographic area in ANWR would be used for development, yet it has the capacity to replace the amount of oil in the 7th largest import nation.

Governor Palin noted in highlighted in her Facebook note yesterday how much energy independence is interrelated with all components of public policy and daily life:

 He fails to understand the fundamental truth that there is an inherent link between energy and prosperity, and energy and security. Oil prices affect everything in our lives, including where we send our sons and daughters in war. Developing resources here grows our economy, decreases our trade imbalance, creates hundreds of thousands of good-paying jobs, and secures our union by eliminating our dependence on dangerous foreign regimes who use our energy insecurity as a weapon against us. Access to secure domestic energy will make us a more peaceful and prosperous nation. 

Obama doesn’t understand this—just as he doesn’t understand the dangers of his wasteful spending. Our energy policy is also linked with our fiscal and monetary policies. In light of America’s unsustainable $16 trillion debt, there’s more talk about dumping the U.S. dollar as the world’s reserve currency, which is the currency used to buy and sell oil. If that happens, we’ll feel the pain of inflation everywhere—especially at the pump. That, in turn, will trickle down to everything in our economy. Those living on fixed incomes and retirement pensions and annuities will feel the pain especially hard. So, this is one more reason to get government debt under control with sound monetary policy that doesn’t try to “inflate away” our debt with currency manipulation and gimmicks like quantitative easing.

There is an interelatedness between our national security and energy security. The 4th largest importing nation is Venezuela--a nation controlled by a dictator closely allied with Iran, who has threatened multiple times recently to block the Strait of Hurmuz where 20% of the world's oil passes through daily. Oil from Saudi Arabia, Iraq, and Kuwait all are transported through this area, and these three countries are among the top ten importing sources of oil. Drilling here instead of relying on foreign nations has the potential to create a million jobs by 2018. Plus, what could be secure our nation more than to make America our own greatest source of energy.

One thing that Governor Palin understands that very few people mention is the relationship between monetary policy and energy. In fact, Governor Palin warned about how a devalued dollar may lead to the the dollar being dropped as the reserve currency and the relationship of that sobering possibility to both inflation and the debt  two and a half years ago in October of 2009.  This is a point she later echoed when she called out Ben Bernanke on his quantitative easing implementation in November 2010:

 All this pump priming will come at a serious price. And I mean that literally: everyone who ever goes out shopping for groceries knows that prices have risen significantly over the past year or so. Pump priming would push them even higher. And it’s not just groceries. Oil recently hit a six month high, at more than $87 a barrel. The weak dollar – a direct result of the Fed’s decision to dump more dollars onto the market – is pushing oil prices upwards. That’s like an extra tax on earnings. And the worst part of it: because the Obama White House refuses to open up our offshore and onshore oil reserves for exploration, most of that money will go directly to foreign regimes who don’t have America’s best interests at heart.

Now, nearly a year and a half later, and oil is over $100 a barrel. This, of course, makes the price of everything higher. Not only is inflation by itself causing consumer items to be more expensive, but high fuel prices (also raised by inflation) are contributing to increased consumer prices as well. But, oh no, we were supposed to listen to our betters who told us ten year ago that ANWR would take too long to develop.

Crossposted here.

Governor Palin and Forward Focused Leadership--Part I

President Reagan once said, " to grasp and hold a vision--that is the very essence of successful leadership". One of the keys to leadership is being forward focused. This involves seeing beyond the next release of one's polling data, seeing beyond the next budget, and beyond the next election. It involves seeing the possible barriers and knowing how to address them based upon the successes of the past while also seeking for ways to address problems in the future. However, so often politicians make decisions based upon their own selfish myopic vision or a vision based upon yet to be proven ideas. True leadership involves making decisions in light of what's best for both the present and the future. When we look in particular at energy, we can certainly see that Governor Palin has exhibited forward focused leadership.

We aren't energy independent, and energy prices are high because politicians have not had the political will to drill in America, which would both make us more independent and help increase the worldwide oil supply so that it is not so dependent on unstable countries. A forward focused politician like Governor Palin understand this very well. To address an energy price crisis, you must prepared for the crisis. You can't be floundering looking for companies and speculators to demonize, nor be unable to offer true solutions. One major way to combat a potential crisis is essentially to prevent it and/or mitigate its effects. It is simple supply and demand economics, as Governor Palin discussed last night. If supplies are decreased and demand is held steady or increased, prices are going to go up. Unrest in oil rich countries like Libya have decreased supplies, which has influenced President Obama to call for the Saudis to ramp up their production. Additionally, he has praised and funded drilling in Brazil in hopes of helping America to be one of Brazil's "best customers". Neither of those supposed solutions bring America any closer to energy independence, nor are they the result of a forward focused plan.

Of course, the better option is to have been drilling here in America which would add to the supply of oil internationally in addition to adding to the economic, monetary, and the national security strength nationally. Governor Palin, of course, has been a strong and longtime proponent of drilling in places like ANWR. In 1996, President Clinton vetoed a bill that would have allowed drilling in ANWR. Liberals often poo poo such notions as drilling because it would supposedly take ten years for oil to be produced. Of course, it has now been fifteen years since President Clinton's veto. Oil producers in Alaska could have been developing for at least five years by now, which recent estimated would result in oil production at a minimum of around a half million barrels per day.

Yesterday marked the one year anniversary since President Obama put a moratorium on offshore drilling following the Gulf oil spill. Although he has lifted the moratorium, he has been very slow in issuing permits, and the EPA, an additional regulatory arm of the Obama administration, has been antagonistic to offshore drilling. Governor Palin also has been very critical of President Obama's offshore drilling moratorium. In fact, in response to a question on what she would do to help ease oil prices, she mentioned that she would not have instituted the drilling moratorium:

I never would have done what President Obama did and that’s engage in that moratorium after the tragedy in the Gulf with the spill. He should have been more sensible in figuring out what the problem was, what the solution was to the gulf spill but not take it out on the rest of the country and prohibit drilling onshore and offshore is what he did. 97% of our offshore area locked up after that and there still is a quasi-moratorium because the EPA is making it virtually impossible for drillers to be out there extracting responsibly the God-given resources that we have domestically.

[...]

Now the President is engaged now in what he wants to get to the bottom of with whether it be collusion, or price fixing, or speculators, what else is driving up the cost. Well he can look at other states like Alaska. We already did a study to find out was it collusion? Was it speculators? What was driving up the last big spike in gas prices? And we found that no, more than anything it is a supply-and-demand, a very basic economic principle, supply-and-demand.

These are not the words of a woman who is merely engaging in armchair politicking. Governor Palin was forward focused during her tenure a Governor. In addition to being a strong proponent of expanding energy development to help make America more energy independent through drilling for oil, she also acted to move development of natural gas forward through the development of a pipeline that would bring natural gas from Alaska to the Lower 48. As Governor, she moved a natural gas pipeline project further than any of her predecessors. A New York Times hit piece in March tried to attack AGIA, but all of the evidence points to AGIA as being right on target:

The New York Times also questions the progress of Governor Palin’s natural gas pipeline project–the Alaska’s Gasline Inducement Act (AGIA)–which will bring natural gas from the North Slope of Alaska through Canada to the Lower 48 as an additional means of achieving energy independence. Governor Palin’s pipeline project was done in a transparent free-market friendly manner with proposals available for public consumption-- a far cry from the behind-closed-doors pipeline discussion with oil companies that were commonplace and unsuccessful in previous administrations. The New York Times argues that neither gas suppliers nor federal permits had been obtained for the project.

However, at the end of the first open season for bidding by gas suppliers this past summer, there were “several major players” who had submitted bids. Additionally, the pipeline company TransCanada and oil company ExxonMobil, both partners on AGIA-backed pipeline project, have had discussions with BP-ConocoPhilips to work together on the project. Additionally, the permitting process with both American and Canadian regulatory agencies has made “significant progress,” and the progress is right on track with time projections.

Following one of the early successes of this project nearly two years ago, Governor Palin was interviewed by Matt Lauer, where he questioned the need for the pipeline as natural gas prices were low at the time.Governor Palin called such an idea "short sighted" (see especially at the 2:15 mark and following):



Governor Palin is right about the need to make America energy independent when it comes to both oil and natural gas. She also was right to note the short sighted nature of evaluating future energy development entirely upon current prices. The most recent natural gas futures were at $4.58 per MMBtu (million British thermal units). When Governor Palin was interviewed in June of 2009, natural gas futures were at $3.56 per MMbtu. Prices have increased. Governor Palin was right to note that it would have been short sighted not to proceed when natural gas prices were low. As you can see in this chart here, natural gas prices are volatile, just as oil prices are. What is the best way to deal with both? Ensure that there are sufficient supplies produced in the United States. Increased domestic supplies soften the blow when instability in other energy producing nations affect the world energy market. Additionally, such efforts would provide jobs and protect America's national security.

Critics may claim that someone who is forward focused on energy would be looking to green energy initiatives as President Obama has focused on green energy in his last three weekly addresses and in much of attempt to deal with the current high energy prices. Governor Palin has been rightly critical on the overemphasis of such initiatives, pointing to the failure of green energy in Spain that has crippled employment and contributed to their massive debt problem. Meanwhile, President Obama is pushing for electric cars that have proven to have major problems and are mostly re-charged on energy derived from fossil fuels like coal. Governor Palin recognizes that in the desire for energy independence, knowing what doesn't work is just as important as knowing what does.

Part of leadership involves solving problems, but another part of leadership involves having the foresight to both prevent problems from happening in the first place and mitigate the effects when there are problems. This is why Governor Palin warned that not seeking energy independence would result in the federal government being tempted to tap into our strategic petroleum reserves. That is why Governor Palin has been a very vocal proponent for expanding offshore drilling and drilling on land in the United States. That is why she championed the natural gas pipeline to bring Alaska's abundant natural gas to the Lower 48. That is why she has the justified skepticism with the social engineering disguised as "green energy" focus of the Obama administration. Governor Palin has shown that she has the leadership skills to be both a problem solver and a problem preventer.

Crossposted here, here, and here.

Governor Palin is Right on Energy...Again

Last fall, Stacy and I put together a post highlighting several of the economic and national security problems have emerged since Barack Obama became president, as Governor Palin warned in her 2008 RNC speech. With the current chaos in the Middle East and northern Africa and with President Obama's perpetual aversion to drilling for oil in America, more of Governor Palin's warnings from her 2008 RNC speech are sadly coming to fruition. She said in that speech two and a half years ago (emphasis mine):

When a hurricane strikes in the Gulf of Mexico, this country should not be so dependent on imported oil that we are forced to draw from our Strategic Petroleum Reserve.

And families cannot throw away more and more of their paychecks on gas and heating oil.

With Russia wanting to control a vital pipeline in the Caucasus, and to divide and intimidate our European allies by using energy as a weapon, we cannot leave ourselves at the mercy of foreign suppliers.

To confront the threat that Iran might seek to cut off nearly a fifth of world energy supplies ... or that terrorists might strike again at the Abqaiq facility in Saudi Arabia ... or that Venezuela might shut off its oil deliveries ... we Americans need to produce more of our own oil and gas.

And take it from a gal who knows the North Slope of Alaska: We've got lots of both.

Our opponents say, again and again, that drilling will not solve all of America's energy problems — as if we all didn't know that already.

But the fact that drilling won't solve every problem is no excuse to do nothing at all.

Replace the hypothetical situations Governor Palin outlines with the current situation in Libya and throughout the Middle East and we have the today's current energy situation. Governor Palin warned that America should not become so dependent upon foreign sources that we would have need for tapping into strategic reserves in the case of a crisis. However,the New York Times reports:

As oil prices have risen in recent weeks, calls have been growing in Congress for the Obama administration to consider tapping into the nation’s strategic petroleum reserve, which is now at its full capacity of 727 million barrels.

...

“Between the lost production in Libya, the crude oil dislocation associated with additional Saudi production and the prospect of further turmoil in the region,” Mr. Bingaman, Democrat of New Mexico, said in a floor statement late Wednesday, “we are now unquestionably facing a physical oil supply disruption that is at risk of getting worse before it gets better.”

Republicans on the House Energy and Commerce Committee feel that tapping into the Strategic Petroleum Reserves should only be done in situations like Hurricane Katrina, the most recent time it was accessed, not in our current conditions. At full capacity (as it is now), the reserves hold 727 million barrels of oil, enough to replace foreign sources of oil in the US for about 5 months. The Obama administration feels that this discussion is a reaction to transient oil price increases, and actually, their 2012 budget proposal suggests selling half a billion of oil from the reserves to pay for governmental programs. They feel no need to access this reserve at the moment.

The fact that such a possibility is even being discussed shows that, of course, Governor Palin was right on the need for energy independence, and her assertion that there is an inherent link between energy independence and national security is indeed correct.

The Obama administration has gone out of its way to not tap into our energy resources. Just yesterday, the Obama administration appealed a ruling from a judge calling for the Interior Department to administer leases for drilling in the Gulf. The judge that the administration is appealing is one of two judges who has held the administration in contempt for not appropriately lifting their drilling moratorium in the Gulf by administering drilling leases. On Monday, the Interior Department did issue its first lease since last year's disastrous oil spill. However, this lease was for a project that had yet to be completed and was halted due to the oil spill. Essentially, this lease allows for an old project to be completed not for new drilling to be initiated.

In addition to Gulf oil, the Obama administration has not sought to extract the abundant energy resources in Alaska. Earlier this week, Doug linked an article at Human Events that questioned the Obama administration's neglect of ANWR and other Alaskan sources. ANWR has the potential to produce 1 million barrels of oil a day, and yet it has remained untapped. Additionally, the Trans-Alaskan pipeline system is only operating at 1/3 of its current capacity, and the EPA's over regulation has essentially halted Arctic drilling until 2012. Again, Governor Palin is right. Drilling isn't going to solve all problems,but President Obama is doing very little to tap into our national resources and is actually obstructing resource development.

Energy has an effect on America's economy as well. As Governor Palin spoke of in her interview with Bill O'Reilly last night, allowing energy development in Alaska would help lower unemployment and would reduce people's reliance upon government assistance. The White House has even admitted that their moratorium on drilling in the Gulf would cost tens of thousands of jobs. Their moratorium also led to Texas based company, Seahawk Drilling, to file for bankruptcy. Not only are Obama's policies killing jobs, they are contributing to increased oil prices (yesterday, prices hit their highest since September 2008). His policies of "diversifying" energy supplies, rather than increasing production of legitimate energy sources, are having a detrimental effect, as the Heritage Foundation reports:

Anyone could have predicted that the recovering world economy, coupled with the continued growth of India and China, was going to push oil prices higher. So if an Administration wanted to keep gas prices down, they could have mitigated increased oil demand by increasing domestic oil production. But that is not what the Obama Administration has done. Instead of increasing domestic oil supplies, the Obama Administration has cut them at every opportunity, and Americans are now suffering because of those choices.

...

According to Heritage analysts Nick Loris and John Ligon, Obama’s energy policy consists of: increased biofuel production, increased electric vehicle production, and increased renewable power production. These are all terrible public policies. The major source of biomass production, corn-based ethanol, produces less energy per unit volume than gasoline, contributes to food price increases, costs taxpayers $4 billion to produce 2 percent of the total gasoline supply, and has dubious environmental effects.

President Obama's policies focus on yet-to-be-proven sources and eschew proven and abundant sources that we have right here. Such policies lead to reliance on energy sources from volatile nations, fewer jobs, and higher fuel prices. America cannot be powered on hope and change. Governor Palin, yet again, was right on our need for energy independence.

Crossposted here, here, and here.