Obama and Keystone

In his January 2012 State of the Union Address President Obama called for (again) investments in clean energy. He announced that the DoD, the world’s largest consumer of energy, “will make one of the largest commitments to clean energy in history -– with the Navy purchasing enough capacity to power a quarter of a million homes a year.” He was referring to recently established 1-megawatt solar array on Buckley Air Force Base, Colorado. Note that the Department of the Navy's energy security goals include to produce or consume one gigawatt of new, renewable energy on its naval installations.

Obama talked about “A future where we’re in control of our own energy, and our security and prosperity aren’t so tied to unstable parts of the world. An economy built to last, where hard work pays off, and responsibility is rewarded.”

He touched upon a few interesting things like: “American-made energy”, “public research dollars, over the course of 30 years, helped develop the technologies to extract natural gas out of shale rock,” “we’ve subsidized oil companies for a century. “

The next day he talked at at Buckley Air Force Base. (see Remarks on American Energy, on January 26, 2012, at Buckley Air Force Base, Aurora, Colorado)

Obama mentioned again a blueprint for an economy “built on American energy, fueled on homegrown and alternative energy sources that make us more secure and less dependent on foreign oil, which obviously is not just good for our prosperity but also for our security.”  

And of course, he talked about energy. Here are in my opinion some important points:

“For all our lives, America has been talking about decreasing our dependence on foreign oil…

The Navy is going to purchase enough clean energy capacity to power a quarter of a million homes a year. And it won’t cost taxpayers a dime….

The less we depend on foreign oil, the more secure we become as a nation….Reducing our dependence on oil is going to strengthen our national security….It will make energy cheaper for our businesses and for our families. “

I don’t know whether Obama had a chance to look at the U.S. Energy Information Administration’s Annual Energy Outlook which was release shortly before his address to the nation.

For instance, Energy Information Administration reported that the U.S. is in the midst of a dramatic turnaround. It says that continued development of tight oil in the onshore U.S. and exploration and production in the U.S. Gulf of Mexico will push domestic crude oil production from 5.5 million barrels a day in 2010 to 6.7 million barrels a day in 2020; then production will fall off to 6.1 million barrels a day and stay there through 2035. U.S. oil demand will rise a bit over the period, by almost 1 million barrels per day, from 19.2 million barrels per day in 2010 to 20.1 million barrels per day in 2035. Because of moderate demand, increased oil production, net oil imports will decline from 49 percent in 2010 to 36 percent in 2035.

Obama’s these and previous speeches, and the EIA’s report bring a crucial questions to my mind. If the US wants to reduce oil imports from the countries “unfriendly” to the US why Obama administration rejects imports from friendly countries?

Obama’s administration rejected the cross-border permit for the TransCanada Corp.’s proposed Keystone XL oil pipeline from Canada, saying that a deadline imposed by Congress (February 21) does not give it time to properly determine if the proposed project is in the national interest in its current state. Keystone XL, a 1,600-mile pipeline that would carry some 830,000 barrels of bitumen from the oil sands of Alberta, Canada, to US Midcontinent and Gulf Coast refineries. Proposed pipeline has been studied exhaustively for more than 3 years (since 2008). (see Reuters timeline).

Congratulations to Republicans and environmental organizations and others who oppose the pipeline which would carry “dirty” oil by placing politics over policy. According to TransCanada pipeline would create 13,000 US jobs in construction and 7,000 in manufacturing. It would surely reduce oil imports from the countries “unfriendly” to the US. If this is not an enormous mistake and lack of leadership I don’t know what it is.

During his campaign, President Obama liked to quote Dr. Martin Luther King and talk about ``the fierce urgency of now.'' Obama’s Yes We Can speech ends with “where we are met with cynicism and doubt and fear and those who tell us that we can't, we will respond with that timeless creed that sums up the spirit of the American people in three simple words -- yes, we can.” Today we understand what he really meant - Yes We CanNOT.

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