President’s jobs council recommends ‘all in’ strategy for energy

Source: Phil Taylor • E&E  • Posted: Wednesday, January 18, 2012

The Obama administration should open more federal lands to energy development and speed permitting of new pipelines and transmission projects to create jobs and strengthen energy security, according to a panel of business leaders advising the president.

In a report delivered today, President Obama’s Council on Jobs and Competitiveness also recommends sustained investments in research and development, the extension of clean energy tax credits and increased energy efficiency.

The recommendations — part of a broader package that includes corporate tax reform, regulatory overhauls and workforce education — come during an election year in which Obama is unlikely to get much cooperation from Congress.

The report urges continued expansion of renewable energy but warns of a rising global demand for fossil fuels as billions of people in developing countries rise to middle-class lifestyles.

Until then, the administration must do all it can to reduce the country’s current imports of more than 300 million barrels of oil a month, which cost $1 billion per day, the report said.

“Over the long term, we expect that innovation and technological advancements will greatly reduce America’s reliance on fossil fuels,” the report says. “Until then, however, we need to be all in.”

The Obama administration has faced intense criticism from Republicans and the oil and gas industry, which say it has barred future development in the Atlantic and Pacific oceans and slow-walked development of oil-rich waters north of Alaska. The administration must make a final decision over whether to allow new drilling in the Arctic Ocean, a choice likely to come as gas prices rise in the run-up to Memorial Day.

In addition, business leaders and lawmakers of both political stripes have launched aggressive campaigns urging the president to approve the Keystone XL pipeline, which would ferry crude from Canadian oil sands to refineries in the Gulf Coast, creating thousands of new jobs. The project is strongly opposed by the president’s environmental base.

Supporters of the president note that total domestic oil production was higher in 2010 than in any year since 2003. The Interior Department last month held its first lease in the Gulf of Mexico since the Deepwater Horizon oil spill in April 2010, yielding more than $300 million in revenues.

In addition, oil production from onshore public lands increased from 109 million barrels in 2009 to 114 million barrels in 2010, a 5 percent bump, according to the White House. While the nation’s economic recovery continues to sputter, imports of foreign oil have decreased.

“I’m proud that we’ve taken action on a majority of the council’s recommendations on issues ranging from insourcing to permitting to clean energy,” Obama said in a statement. “But we also know there’s a lot more work to do, which is why we’re committed to continuing to invest in strategies that support job growth.”

House Speaker John Boehner (R-Ohio) said the report supports an approach to job creation and energy development his party has been pursuing for more than a year. He urged the Senate to take up some 30 bills his chamber has passed, many of which advance the council’s recommendations.

Robert Dillon, a spokesman for Senate Energy and Natural Resources Committee ranking member Lisa Murkowski (R-Alaska), said that on first blush, the report reflects proposals the senator has pushed for several years.

“We certainly hope the president can rise to the occasion,” Dillon said. “It’s an election year, and the president has shown that he is more concerned with his left flank than the jobs issue. Is he going to listen to this report? The devil is in the details.”

Environmentalists said they were disappointed that the report paid so much attention to fossil fuels.

“They got it half right,” said Athan Manuel, director of lands protection at the Sierra Club. “We understand the practicality of fossil fuels being with us for a while, but we think they should be doing more to encourage renewables.”

Other environmentalists said proposals to increase fossil fuel production should be expected from a council of business executives. The president’s 27-member jobs council is chaired by General Electric Co. CEO Jeffrey Immelt and includes the executives of a power company, a major railroad and labor union.

“It would be nice if sometime these self-appointed ‘blue ribbon’ type groups were to study and apprise themselves of the actual facts that are relevant to their recommendations,” said Dave Alberswerth, a senior policy adviser for the Wilderness Society who worked for Interior during the Clinton administration. “For instance, that the oil and gas industry already controls tens of millions of acres of offshore and onshore federal lands; that the industry is sitting on thousands of onshore drilling permits that they haven’t used; or that almost half of the coal produced in this country already comes from federal lands, and that the coal industry has commitments from the federal government to lease to them over a billion tons of coal in Wyoming alone.”

In addition to allowing more oil, gas and coal to be developed on federal lands, the report suggests opening new areas to renewable energy and streamlining the approval process as it has done for solar projects in Southern California and Arizona.

It also recommends the president encourage production on leases the oil and gas industry already owns, a possible endorsement of the administration’s controversial “use it or lose it” proposal for federal leases.

In addition, it lauds the administration for increasing its fuel efficiency standards for automobiles, a move expected to significantly reduce oil imports and save consumers thousands of dollars a year.

While many of the report’s recommendations — particularly clean energy tax extensions and corporate tax reform — will need the approval of Congress, Interior already has the authority to expand and accelerate drilling and mining.

What new steps the Obama administration might take in an election year remains to be seen.

The president last May introduced a plan to offer more leases in an Alaskan petroleum reserve and establish an interagency team to expedite permitting of conventional and renewable energy in the region.