Considering the brutal recession, you'd expect the Obama administration to be obsessed with creating jobs. And so it is, say the president and his supporters. The trouble is that there's one glaring exception to their claims: the oil and natural gas industries. The administration is biased against them -- a bias that makes no sense on either economic or energy grounds.
What is the evidence that Obama harbors an irrational hatred of oil and gas? Samuelson's case rests on three main points:
1. "Contrary to popular wisdom, the United States still has huge oil and natural gas resources."
2. The oil and gas industry employs many more people than the solar and wind industries.
3. Obama favors raising fuel efficiency standards, and his Secretary of the Interior, Ken Salazar, "canceled 77 leases in Utah because they were too close to national parks."
Taking #3 first, because it's the only one that has anything to do with Obama: It probably sounds like I'm misrepresenting what must be a much longer, more ominous bill of particulars. If you don't want to go see for yourself I can only assure you this is not the case. Samuelson more or less admits himself that there's not much there:
Any one of these [i.e. the Utah lease cancellations or raised fuel efficiency standards] alone might seem a reasonable review of inherited policies, and it's true that Salazar has maintained a regular schedule of oil and gas leases. Still, the anti-oil bias seems unmistakable.
Ah, yes. Even though fuel efficiency standards have been going up for years, and the Interior Department has always existed solely to do things like keep oil & gas companies away from national parks, you should still see such efforts as part of a personal crusade of Obama's.
Encouraging more U.S. production would also aid economic recovery, because the promise of "green jobs" is wildly exaggerated. Consider: In 2008, the oil and gas industries employed 1.8 million people. Jobs in the solar and wind industries are reckoned (by their trade associations) to be 35,000 and 85,000, respectively. Now do the arithmetic: A 5 percent rise in oil jobs (90,000) approaches a doubling for wind and solar (120,000). Modest movements, up or down, in oil will swamp "green" jobs.
It's true that the oil & gas industry is vastly bigger than the solar and wind industries, but Samuelson's so-called "arithmetic" is shameless sleight of hand. He's trying to take the true fact that the oil & gas industry is bigger and make it look like the inherently more job-creating energy source, with greater sensitivity to "[m]odest movements, up or down." But all he's done is assume a completely fictitious scenario in which the United States has been offered a coupon for a 5% employment increase in the energy industry of our choice. Since no such deal is on the table, all he's proven is that the oil & gas industry currently employs many more people, which was a given.
And getting to his first point last:
"Huge oil and natural gas resources"? No. Our oil and gas reserves are not huge in any meaningful sense. We're #14 in proved reserves with about 22 billion barrels. Samuelson argues that this number is really much larger once you include optimistic projections for our "unconventional" prospects, that might be accessible at some point, if finding and development costs were no object. By sufficiently relaxing the definition of reserves for the U.S. (only), Samuelson takes us from a paltry 22 billion barrels to 800 billion barrels or "triple Saudi Arabia's proven reserves." Not bad for a paragraph's work.
Of course, even assuming we're sitting on much more oil and gas than we realize, the claim that Obama is "undermining" the oil industry's efforts to produce more oil is very hard to square with the fact that oil companies are cutting back on exploration all by themselves:
April 24 (Bloomberg) -- The number of oil and natural gas rigs operating in the U.S. fell to the lowest since March 2003 this week as natural gas prices dropped, according to data published by Baker Hughes Inc.
Rigs exploring for or producing oil or gas declined by 20, or 2.1 percent, to 955, the fewest since March 21, 2003, Baker Hughes said today on its Web site. The rig count has fallen 52 percent from 1,992 on Nov. 7.To put a fine point on it, oil & gas companies could be drilling and producing at a faster rate than they are today. Because of commodity price declines, they (the companies) are, probably correctly, deeming fewer projects to be economical and canceling or shutting them down accordingly. Yet here is how Samuelson closes:
Improved production techniques (example: drilling in deeper waters) have increased America's recoverable oil and natural gas. The resistance to tapping these resources is mostly political. To many environmentalists, expanding fossil fuel production is a cardinal sin. The Obama administration often echoes this reflexive hostility. The resulting policies aim more to satisfy popular prejudice -- through photo ops and sound bites -- than national needs.
Maybe the most bizarre thing about this piece is that Samuelson never once confronts the issue of global warming head on. Instead, he feigns bafflement at all the "hostility" towards fossil fuel production, as if it could only be motivated by religious ("cardinal sin") rather than scientific dictates. And rather than explicitly denying that there's any reason to replace fossil fuels with "clean" (his quotation marks) fuels, he weasels out by pretending that Obama thinks we burn oil mostly for electricity:
The president is lauded as a great educator; in this case, he provided much miseducation. He implied that there's a choice between promoting renewables and relying on oil. Actually, the two are mostly disconnected. Wind and solar mainly produce electricity. Most of our oil goes for transportation (cars, trucks, planes); almost none -- about 1.5 percent -- generates electricity. Expanding wind and solar won't displace much oil; someday, electric cars may change this.
So there might be electric cars someday? Pretty visionary. But why, Robert? Why would we ever want to stop refining and burning crude oil? We've got plenty of the stuff!