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Townhall…
A Solution at Obama's
Fingertips
By Jonah Goldberg
On Tuesday, the president will deliver his State of the Union message.
The conventional wisdom is that Barack Obama will continue his "move to
the center." The quotation marks are necessary because some people
think he really is moving to the center, while others think he just
wants to appear like he is.
Either way, this undoubtedly means Obama will try to seem as if he's
meeting Republicans halfway on their "reasonable" demands (quotation
marks for the same reason as before) while drawing a stark line against
their "unreasonable" ones.
As much as I may enjoy it, this sort of strategizing leaves most
Americans cold. As far as I can tell, these days they are less
concerned with "triangulation" than they are with the creation of good
jobs that aren't bogus make-work, or paid for with money borrowed from
China or our grandkids.
If that's the case, the solution is right in front of the president's
face. To echo a chant from the 2008 Republican convention, "Drill,
baby, drill!"
The objective case for developing our oil and gas wealth is pretty
straightforward. With the exception of climate change, pretty much
everything the Obama administration considers a major problem would be
improved by opening the floodgates to new exploration.
The deficit? The oil industry already pays the U.S. treasury more than
$95 million a day in taxes, rent, royalties and the like. If you expand
exploration, you expand revenues. According to estimates, if America
unlocked its oil and gas reserves, the government could take in
somewhere between $1 trillion and $2 trillion in additional revenue
over the coming years. And that's not counting the increased revenues
from the stimulus of lower fuel and energy costs.
Trade imbalances? Domestic oil and gas is, by definition, not imported.
The more we produce here, the less we import, or the more we can sell
overseas. Either way, the trade deficit goes down and GDP goes up.
Jobs? You can't drill for American oil or natural gas in China, Saudi
Arabia or anyplace other than America. Oil and gas exploration jobs pay
more than twice the national average.
Just take a gander at North Dakota, where oil production is up 138
percent since 2008. The boom "has helped make its economy almost
recession-proof," writes American Enterprise Institute economist Mark
Perry. North Dakota's "jobless rate never exceeded 4.4 percent even
during the Great Recession when the U.S. rate hit 10.1 percent." North
Dakota, with a $1 billion surplus, and the lowest unemployment rate in
the country, has more jobs today than it did when the recession started
in 2007. Perversely, as AEI's Steve Hayward notes, if trends continue,
North Dakota may well outproduce California and Alaska (it's already
zoomed passed Oklahoma), not because California and Alaska are running
out of oil, but because the feds keep it under lock and key.
All in all, the American Petroleum Institute believes we may have 100
billion barrels of untapped oil -- that's 10 million barrels a day for
30 years, or the equivalent of our total imports of foreign oil.
Meanwhile, it's quite possible that the United States could be the
Saudi Arabia of natural gas, with an estimated 100-year supply of the
stuff, and more being discovered every day.
But what about global warming? Well, even if you agree that climate
change is a real problem, the simple fact is that we're stuck with
fossil fuels for at least a generation longer, in part because "green
energy" isn't ready for prime time. Moreover, the developing world will
not significantly curb its emissions until they're developed.
President Obama is fond of saying that we need to look to China's
example. They're allegedly leading the way on solar and wind power.
Maybe that's true, though I think there's a lot of hype there. But, OK.
What people leave out is that China is hardly curbing its fossil-fuel
development.
Why can't America have a similar do-it-all strategy?
As part of a grand bargain, the president could, in his State of the
Union address, propose quintupling the amount of money we spend doing
basic research on alternative fuels, the revocation of subsidies for
the oil and gas industry, and a hike in the gas tax to pay for that
infrastructure bank he wants. Throw in a ban on mountaintop-removal
coal mining while he's at it. All of this in exchange for creating good
jobs here at home, lowering energy costs, reducing our reliance on
foreign oil and cutting the deficit.
Sure, the base of the Democratic Party and the editorial board of the
New York Times would scream bloody murder. But for a guy trying to get
re-elected, that's a bonus.
Townhall
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