George Rebane
[This is the submitted form of my regular column in The Union that was published in its 10mar12 print and online editions.]
This administration has gone into maximum bamboozle mode on the nation’s energy policy. Their lies and contradictions are coming out so fast and thick that it’s hard to count, let alone catalog them. But it’s worth reviewing a couple of facets of what the President is successfully having us swallow.
The first proposition, that this anti-capitalist White House is convincing eager believers with, is that supply has no effect on price. This gets repeated forcefully and often when Obama is asked to increase oil production on federal leases, and permit completion of the Keystone XL pipeline to bring Canadian oil to Texas, instead of China. The dubious and ingenuous claims are that such policy change would only produce 2M more barrels a day, and that this wouldn’t “make a dent” in our 20M barrels a day appetite.
Even accepting the 2M figure, it still represents ten percent of our daily consumption. We all saw what happened to oil prices when Lybia’s revolution took 1.5M barrels off the market. Oil is priced at the margin, and international producers carefully manage supplies, keeping them at levels to maintain a high price. But these suppliers can only do this if they are cut slack by allowing them to control the marginal supply. And that is exactly what Obama is letting them do. If we injected an additional 2-4M barrels a day into the supply chain, oil and gasoline prices would plummet.
Out of one side of their mouths, the administration denies this impact of supply on price, and out the other side they promise to release oil from our strategic petroleum reserve if gasoline prices go too high. Which is it then Mr President?
All this is delivered to a background drumbeat of our being told that this President has actually increased America’s oil production. Well that’s not true either. Oil production has increased on private lands in spite of federal opposition, and has declined on federally leasable reserves.
All of this nonsense only works with an electorate that at best is not paying attention, and at worst couldn’t understand if it did. And that is exactly what this administration is betting on between now and November.
But there is another reason why Team Obama is doing its level best to keep prices as high as possible, given that there is an election to be won. Washington’s socialist society has doubled down on green energy’s faulty start through a desperate but inept policy of picking winners and losers in the ‘sustainable energy’ industry. And they do this in a witless manner that would cause career ending embarrassments were we a more capable electorate. But the liberal elite have sized us up perfectly.
In addition to the growing gaggle of failed Solyndras, we have massive job cutbacks with still favored players like First Solar trying to stay solvent with existing subsidies. And then we come to the energy joke du jour out of our northwest. The big news on politically cleared media is that we will have to pay heavily subsidized windfarms in the Pacific Northwest NOT to produce energy (you can’t make this stuff up).
It turns out that for a good part of the year in that region we have a surfeit of wind and water to generate more power than can be consumed. The Bonneville Power Authority oversees the hydro-electric dams and windfarms up there. In order to satisfy a tangled web of EPA regulations about fish safety, the dams can’t let the excess water over their spillways and must instead shunt it through their turbines and generate all the needed power to satisfy demand.
The solution is then to shut down the wind mills, causing huge losses for their operating companies. Adding another patch here, BPA will have the hydro people pay the wind farms tens of millions of dollars to make them whole (more here).
So let’s get this straight, "We require taxpayers to subsidize the production of renewable energy, and now we want ratepayers to pay renewable energy companies when they lose money?" asks Todd Myers of the Washington Policy Center. This is part and parcel of our government’s energy policy that maximizes our importing foreign oil from ‘friends’ while claiming the opposite. And these friends subsidize the enemies we are fighting around the world – in short, we are paying for both sides of the wars in which we are engaged. To serve their aims, radical Islam could not have designed a better energy policy for us.
As a people are we really that dense?
George Rebane is an entrepreneur and a retired systems scientist in Nevada County who regularly expands these and other themes on KVMR and Rebane’s Ruminations (www.georgerebane.com).
rebanesruminations.com 
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