Obama, the greens and Big Oil
When he was running for president as a candidate for change, Barack Obama said: “Our energy problem has become an energy crisis because no matter how well-intentioned the promise — no matter how bold the proposal — they all fall victim to the same Washington politics that has only become more divided and dishonest; more beholden to the powerful interests that have the biggest stake in the status quo.”
Little did Obama know how true his statement would ring more than two years later. The real difference, of course, is which special interests are now calling the shots.
A quick look at some of the president’s energy and environmental priorities suggests the most liberal elements of the Democratic Party are now in charge.
As a practical matter, that translates into a distinct anti-oil bias.
Need proof?
Look no further than the Treasury Department’s “Green Book,” which details President Obama’s tax proposals. No surprise, the oil and natural gas industry is in the cross hairs of the president’s taxation binge.
There are many egregious provisions, but for those in an industry that employs thousands of people around the country — with entry level jobs at $18 to $20 an hour — proposals dealing with the taxation of what are known as Intangible Drilling Costs are of particular concern.
Most Americans are blissfully unaware of the numerous costs associated with drilling for oil and natural gas. That is not a criticism — indeed, if folks took the time to understand these intricacies, most would not have time to spend with their families.
Briefly, the current tax code allows these companies to write off essential and expensive operations, which are necessary if we ever want to end our reliance on energy produced by hostile nations. Think of the write-off in the same vein as the mortgage tax deduction. What President Obama and his environmentalist allies are proposing would be similar to eliminating the mortgage tax deduction if you owned a single-family home with a white picket fence and nice green yard. That does not make sense, even to those who live and breathe this stuff.
Neither does the rationale given by the Treasury Department for repealing these indispensable tax write-offs. They conclude it “distorts markets by encouraging more investment in the oil and gas industry than would occur under a neutral system. To the extent expensing encourages overproduction of oil and gas, it is detrimental to long-term energy security … “
The notion that the administration considers tax write-offs to be market distorting is comical, considering it now owns AIG and General Motors and issues orders to other supposedly private companies.
As if to confirm Obama’s distrust of market mechanisms, the book goes on to say, “It is also inconsistent with the Administration’s policy of reducing carbon emissions and encouraging the use of renewable energy sources through a cap-and-trade program.”
Wait! Did they say encouraging “investment in the oil and gas industry” is market distorting, but taxing 85 percent of America’s energy and “encouraging the use of renewable energy sources” is perfectly acceptable? So much for intellectual honesty.
Over the past six months, we have seen the president and his allies in Congress move forward with any number of energy-related policy proposals that would hurt Americans. The aforementioned tax changes are only the beginning. The secretary of energy has canceled lease sales, pushed back deadlines and even canceled research and development efforts on the Green River Formation, which could contain six times more oil than Saudi Arabia.
Obama’s deputies in the House of Representatives are actively pushing a national energy tax, which they deftly call a “cap-and-trade” program. In the Senate, his former colleagues are pushing for a national renewable electricity standard, which would require states to generate certain percentages of power through renewables. Those would seem to be the definition of market distortion.
The powerful anti-oil interests that surround the president and his campaign promise to “end the age of oil in our time” explain his disjointed justification. He is also keenly aware that the markets will not bring about an end to oil, because it and other carbon-based fuels are the lifeblood of our economy.
Let me be clear, I am not against a clean energy economy, but I am against forcing our economy to undergo a radical transformation with complete disregard to the impact on American families and jobs.
In 2004, a little known state senator from Illinois proclaimed, “There’s not a liberal America and a conservative America — there’s a United States of America.” Our United States of America is being forced to take the path on the far left.
Alarm bells should be ringing for our first post-partisan president.
J.C. Watts (JCWatts01@jcwatts.com) is chairman of J.C. Watts Companies, a business consulting group. He is former chairman of the Republican Conference of the U.S. House, where he served as an Oklahoma representative from 1995 to 2002.