Energy policy stuck in the slow lane

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Updated: August 4, 2011 4:20PM

President Obama didn’t make many front pages with his big energy speech Wednesday. It was mostly a rehash of previously stated positions, a venue to take another jab at oil companies and a bit of stagecraft to show he cares about high gas prices and foreign oil dependence without proposing much new to reduce either.

No, there are no quick ways to cut gas prices or oil imports. Still, some pathways to those goals are faster than others. More domestic oil production and innovative use of our vast fossil fuel resources afford quicker approaches to energy security than the green visions of solar power, windmills and electric cars.

What’s more, development and innovation of domestic resources would provide a real-world stimulus to an economy badly in need of new businesses and new jobs. As an example of that potential, an analysis by 14 oil and gas companies found that shallow-water drilling generated $1.8 billion over the last three years in expenditures to vendors and subcontractors outside of the oil-industry states of Louisiana and Texas. That money was spread to businesses as far away from the Gulf of Mexico as Illinois, Pennsylvania, New York and California.

The White House accompanied Obama’s speech with a 44-page “Blueprint for a Secure Energy Future.” The speech and document issued a call for cutting oil imports by one-third by 2025, established a goal of 1 million electric cars on the road by 2015, to be helped by a proposal to turn the $7,500 tax credit for buying one into a cash rebate, and supported natural-gas magnate T. Boone Pickens’ idea of switching the fuel for heavy vehicles from diesel to natural gas.

Obama’s call for more domestic production was mostly a hit on oil firms. He said more than 70 percent of off-shore leases are inactive. That would seem to hint at a conspiracy to gobble up resource-rich acreage and, I guess, sit on it rather than exploit it to the benefit of the industry’s bottom line and stockholders. But, as the Interior Department reports, only 30 percent of leased acreage produces oil.

Obama also cited last year’s BP oil spill. As bad as it was, that oil well accident was an isolated disaster among tens of thousands of wells in the Gulf, and Obama was recently in Brazil encouraging its off-shore oil production. But the administration used the BP spill as a pretext to shut down U.S. drilling. With pump prices pushing toward $4 nationally and already there in some places, the administration started granting drilling permits. But the damage had been done.

“The Obama anti-energy agenda has decreased expected production in the Gulf of Mexico by 360,000 barrels of oil per day” and placed off-limits at least 80 billion barrels of oil in the Outer Continental Shelf, said Thomas Pyle, president of the Institute for Energy Research. That 80 billion barrels is four times the 2 percent of oil reserves Obama claimed for America, Pyle said.

One million electric cars sounds like a lot. But there are more than a quarter of a billion U.S. vehicles gulping gas and diesel.

The Pickens proposal to power big trucks with natural gas has merit. A better, less costly idea is to use natural gas and our abundant coal to produce methanol for flex-fuel cars. It’s expensive to retrofit or build vehicles with tanks for natural gas. It costs $100 to add a different control chip and anti-corrosive fittings to enable new cars to use a fuel formula of up to 85 percent alcohol and 15 percent gasoline, reports Set America Free, a bipartisan coalition that advocates moving U.S. transportation away from oil. Methanol is only half as efficient as gas as a fuel. But it costs $1.25 a gallon, making it a much more economical fuel choice, notes Anne Korin of Set America Free.

Congress should pass the pending Open Fuel Standard Act mandating that automakers produce flex-fuel cars to bring fuel choice to America and create a market for investors in alcohol. Now there’s a specific idea, combined with more domestic oil production, to advance America toward energy security.