America’s Sudden Energy Pivot

by John Brian Shannon

Earlier this year, President Barack Obama sent me a letter outlining the Administration’s energy goals. In it, he laid out his ambitious plans to decrease dependence on foreign oil imports, increase oil and gas exploration and extraction, lower the fuel prices paid by consumers and set historic fuel-efficiency standards for U.S. cars and trucks. Below is a short excerpt of the letter which you can read in full at johnbrianshannon.com

The White House, Washington

March 21, 2012

Dear John:

Thank you for writing.  I appreciate hearing from you, and I share the vision of millions of Americans who want to take control of our Nation’s energy future.  My Administration’s all-of-the-above energy strategy is about developing every source of American energy—a strategy aimed at saving families and businesses money at the pump by reducing our reliance on foreign oil, expanding oil and gas production, and positioning the United States as the global leader in clean energy.

The hard truth is there are no overnight solutions to our energy challenges.  The only way to deal with this problem is through a sustained, serious, all-of-the-above approach.  Under my Administration, American oil production is at its highest level in 8 years, and we are now less reliant on foreign oil than in any of the past 16 years.  We have more working oil and gas rigs than the rest of the world combined, and we have opened up millions of new acres for oil and gas exploration where appropriate and where it can be done safely.  My Administration has also approved dozens of new pipelines to move oil around, including from Canada, which will help create jobs and encourage more energy production.  Thanks to our Nation’s booming oil production, more efficient vehicles, and a world-class refining sector that last year was a net exporter for the first time in 60 years, we cut net imports by 10 percent—or a million barrels a day—in the last year alone.

Only eight months later, on November 12th, the International Energy Agency reported that the United States had suddenly moved from a country historically dependent on foreign oil, to a net exporter. But that is just the beginning. According to the IEA the United States will become the world’s largest oil producer by 2017 — surpassing even Saudi Arabia. Reuters said the IEA annual long-term report surprised top IEA analysts:

Energy developments in the United States are profound and their effect will be felt well beyond North America – and the energy sector”

“The recent rebound in US oil and gas production, driven by upstream technologies that are unlocking light tight oil and shale gas resources, is spurring economic activity – with less expensive gas and electricity prices giving industry a competitive edge.”

“The United States, which currently imports around 20 percent of its total energy needs, becomes all but self-sufficient in net terms – a dramatic reversal of the trend seen in most other energy importing countries.”

“The Chief Economist for the IEA said the US would far surpass Russia as the world’s largest gas producer by 2015 and become the world’s largest oil producer by 2017.”

Former President George W. Bush was completely right when he declared, “America, is addicted to oil.” Sadly, that has not changed. But instead of staying with the status-quo (perilously dependent on foreign oil) the Obama Administration decided early-on to keep billions of dollars of oil & gas investment, jobs, profits and other related economic activity here for the benefit of North Americans. And that, my friends — is historic change for the better.

JOHN BRIAN SHANNON

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An Unserious Man — MY COMMENT

by John Brian Shannon

Read Paul Krugman’s An Unserious Man.

My comment on Professor Krugman’s article begins.

When 5 Minus 4 Equals 10: Republican deficit cutting

First off, let me say that I like Paul Ryan. Hey, I like Mitt Romney too.

I liked his dad, the great George Romney even more – a true and honourable captain of industry who represented American corporations with class and charisma. Now there was a man who should have been a two-term President.

What is before us this day, is the Paul Ryan plan for deficit cutting, tax cuts and cuts to Medicaid.

The proof is in the pudding as they say and independent groups like the non-partisan Tax Policy Center have declared that the Paul Ryan spending cut and tax cut budget will result in a budget deficit $2.5 trillion dollars higher than the one President Obama’s team is promoting.

And that is after essentially dumping Medicaid onto the states (many of which can’t afford their current spending programs, let alone additional spending) and dramatic cuts to the food stamp program (meaning fewer American’s will be able to eat) and cuts to education funding (meaning fewer American’s will be able to attend college).

Not only spending cuts, but tax cuts for America’s highest income-earners and their sponsor corporations. All of whom, are just doing fine, thank you very much, even without the proposed Ryan cuts!

The Paul Ryan budget plan is to cut, cut, cut — but spend even more, with a total of $4.3 trillion dollars of cuts over the next decade — and still the budget deficit will zoom $2.5 trillion deeper into the red than the Obama budget.

How can $4.3 trillion dollars of spending cuts and tax cuts phased in over the next ten years, result in an unsustainable budget deficit of $2.5 trillion dollars? How can offloading Medicaid onto nearly insolvent states help those Americans who depend on it? How can dramatic cuts to the food stamp program not correspondingly increase the property theft crime rate? And how do tax cuts to wealthy Americans and American corporations help the middle class, not to mention removing grants for more kids to attend college?

We only need to look at the utterly predictable results of this economic plan, to accurately judge it’s merits.

1) Dumping Medicaid onto the states, many of which are near-insolvent already, would have the effect of making some of them fully insolvent. It would push other states which are just managing to hang on, to near-insolvency. Strong states would become weaker. How does this benefit the United States of America?

2) Dramatic cuts to the federal food stamp program in an effort to cut spending, will simply result in greater federal law enforcement spending as many thousands of hungry Americans turn to theft, to be able to eat every day of the year. I’ll just bet that the FBI and city and state police forces don’t love this Paul Ryan plan.

3)  When fewer Americans can attend college, correspondingly more people will be entering the workforce with a lower level of education. How will the ‘dumbing down’ of America help the nation?

4) For those Americans in the top tax brackets and for many American corporations, tax cuts for them means a further concentration of wealth for 1% of U.S. citizens, a lower percentage of wealth for the middle class to share and even less for the lowest income Americans. What egalitarian society?

5) A substantially larger budget deficit allows more control over American policy by those financing American federal debt. For the foreseeable future, China (you know, that big, booming country that Republicans like to poke with a sharp stick at every opportunity) will be financing U.S. federal deficits and accumulated debt. As budget deficits and debt soar in America, the number of nations which can step-up to service that debt drops exponentially. The day is coming when China will be the only nation with the wherewithal to float the U.S. economy — IF they choose to do so.

Paul Ryan’s economic platform would weaken individual U.S. states, increase societal class friction, increase disparity in income and education, increase the national crime rate and allow more Chinese government say in U.S. policy.

If U.S. Republicans are America’s friends, who needs enemies?

John Brian Shannon

ABOUT JOHN BRIAN SHANNON

I write about green energy, sustainable development and economics. My blogs appear in the Arabian Gazette, EcoPoint, EnergyBoom, Huffington Post, United Nations Development Programme, WACSI — and other quality publications.

“It is important to assist all levels of government and the business community to find sustainable ways forward for industry and consumers.”

Green Energy blog: http://johnbrianshannon.com
Economics blog: https://jbsnews.wordpress.com
Twitter: @JBSCanada