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Obama's Sensible Oil and Gas Shift

Author: Michael A. Levi, David M. Rubenstein Senior Fellow for Energy and the Environment and Director of the Maurice R. Greenberg Center for Geoeconomic Studies
March 30, 2011

Obama's Sensible Oil and Gas Shift - obamas-sensible-oil-and-gas-shift


President Barack Obama's speech this morning signals an important shift in the administration's thinking on energy. The president has not abandoned his previous emphasis on transformative technology and reducing demand for oil, nor should he. But he appears to have elevated the role of oil and gas production in his strategy by emphasizing its importance within a comprehensive approach. This is smart thinking and smart politics, but he now faces big challenges in translating his vision into policy. He will also struggle to follow through in the face of inevitable opposition from both the left and the right.

Obama continues to face an uphill battle to get his clean energy agenda passed by Congress. Pairing it with a push for expanded production may help win Senate allies and mobilize public pressure. But getting any package that requires new spending through the House remains tough. The president will need to keep up the heat and hope for a lucky break. At a minimum, though, he has positioned himself to be able to blame House Republicans for intransigence if they fail to support his broad energy agenda.

The president will also incur challenges on the left. Last year, when he proposed to expand offshore drilling, environmental groups chafed; those who supported the move did so because they saw it as part of a possible compromise on cap-and-trade. The Gulf of Mexico oil spill, soon after, convinced them that their initial instincts were right. They will be wary of backing him this time around.

This may not cause the president problems in Congress--most of his supply agenda can move forward through executive action. But it could endanger Obama's strategy on natural gas, which appears to be an important part of his vision. The president's strategy appears to be aimed at forestalling an ugly and unproductive clash between industry and environmentalists by forging a responsible and constructive approach to shale gas development. For that to work, though, both sides must be willing to go along.

Timeline: Oil Dependence and U.S. Foreign Policy

To be sure, the speech wasn't perfect. The president's warm words for expanded production were not matched with policy detail. His talk about forcing oil companies to drill existing leases or give them up may win applause, but it will have little if any material impact on U.S. energy security. And while cutting U.S. oil imports by one-third in about ten years is a laudable, reasonable, and ambitious goal, it is important to remember that it will still leave the United States vulnerable to the vagaries of the oil markets a decade hence.

On the whole, though, the president should be applauded for embracing the importance of responsible oil and gas production within a comprehensive energy strategy, even though he still must translate that into real policy. It is now his opponents' turn to show similar farsightedness by supporting serious efforts to cut oil demand.

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