Obama Fought Oil And Lost; Now It’s Back To Reality

The administration has tried for three years to kick-start a “green economy.” But fossil fuels still dominate for lots of good reasons. It’s time for a return to reality.

Over the past several weeks, this page has presented a series of editorials that aim to sort fact from fiction in energy economics. Readers by now may have noticed a common theme — that the Obama administration has consistently refused to learn the lessons of the market.

Nowhere is this clearer than in its quixotic, expensive effort to create a new economy that no longer depends on oil. That quest is a failure, though we doubt if the president will admit as much.

America is waking up to the fact that it has an abundance of oil and natural gas within its own borders, along with ample reserves just across the border in Canada. And production is on the rise for the first time in decades.

After hitting bottom in September 2008 — when its total of 117.9 million barrels was the lowest since World War II — domestic crude oil production has bounded back smartly. In January of this year, according to the Energy Information Administration, it reached 188.9 million barrels, a monthly total not seen since the 1990s.

The all-time high of 308.3 million barrels, reached in December 1970, doesn’t seem so far off, mainly because there is so much oil still in the ground. The EIA now estimates that the U.S. holds 198 billion barrels in “technically recoverable” conventional crude.

This is oil that could be extracted with today’s drilling technology, and it does not include “unconventional” oil that might be produced from shale and tar sands. Just last week, the U.S. Geological Survey pegged the technically recoverable crude outside the U.S. at 565 billion barrels.

Put another way, the U.S. is estimated to hold 26% of the world’s 763 billions of crude oil that is believed accessible to drilling.

What’s good for oil (and America too, in this case) is cause for panic among the more extreme elements of the environmental movement.

They see an opportunity to save the planet slipping away. The reality is that, even if Obama’s aggressive green agenda were hitting all his targets, the impact on the global fuel mix and carbon output would be small.

IBD