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Obama’s Brown Agenda

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Steven F. Hayward, American Review

Don’t expect the President to implement sweeping plans to decarbonise the US economy

Political partisans are always faced with disappointments from their heroes, and Barack Obama is no different. In his first term, Obama was unable to deliver “card check” (a scheme to force automatic enrolment in labour unions), the top item on the wish list of his key backers in organised labour. Although he did manage to get Obamacare through Congress, its unpopularity cost his party its majority in the House of Representatives while disappointing many on the left who think it didn’t go far enough towards single-payer universal coverage. His failure to close the Guantanamo detention facility while expanding several other aggressive Bush-era national security policies, including the controversial drone program, has many leftists gritting their teeth. By far, however, the biggest disappointment for Obama’s left-liberal coalition has to be his handling of energy and environmental issues.

Obama is the author of the near-messianic expectations the climate enthusiasts held for him, proclaiming on the night he clinched the Democratic Party nomination in 2008 that “generations from now, we will be able to look back and tell our children that this was the moment … when the rise of the oceans began to slow and our planet began to heal.”

Right now, however, honest environmentalists are telling their children that Obama stood aside while the House of Representatives’ legislation on climate mitigation died a slow death in the Senate, despite impassioned pleas for him to make an effort to push the bill across the finish line. (These pleas fell on the deaf ears of Obama’s first-term chief of staff, Rahm Emanuel, who one account described as “an obstacle to meaningful climate legislation”.) Despite Obama’s 11th hour intervention in Copenhagen in 2009, the UN Kyoto process hit the wall anyway.

The result of Obama’s lavish push for “green energy” in his 2009 orgy of stimulus spending ranges from pathetic job creation numbers to serial bankruptcy to outright crony corruption (such as Solyndra, the politically connected solar power company that soaked up $535 million in subsidies before going belly up). Add to this other Obama environmental decisions, such as cancelling a new ozone standard and delaying a new mercury regulation. Imagine the response from environmentalists if a Republican president had taken the same steps.

True, environmentalists are partially mollified over the one thin bone Obama has held out for view: the delay in deciding on the Keystone XL pipeline, the proposed conduit for the massive amount of new Canadian tar sands oil that has rapidly come online over the last decade. Environmentalists remain nervous that Obama may yet capitulate on Keystone, hence the continuing highly visible protests and civil disobedience outside the White House and wherever Obama travels. Obama’s feckless performance over Keystone summons forth every stale cliché of political journalism: he’s caught between a rock and a hard place, trying to fend off a perfect storm of tipping points that are sure to offend one or another of his key constituencies. (Pro-Obama labour unions have been vocally in favour of building Keystone, along with expanded hydrocarbon production on government-owned land.)

The Keystone fight, however, is merely symbolic of a much larger dilemma facing Obama — the politically convenient but ideologically inconvenient fact of the hydrocarbon energy boom currently underway in the US. The natural gas boom delivered by new drilling technology employing hydraulic fracturing (“fracking”) gets most of the notice, but US oil production is also unexpectedly soaring, dramatically reversing a steady 20-year decline. The 40 per cent increase in US oil production over the last five years — the largest increase of any nation — has had the concomitant effect of reducing US oil imports by one-third. The US is within striking distance of importing zero oil from the Middle East if it chooses. The fall in natural gas prices — from nearly $14 per thousand cubic feet a few years ago to around $3 today — is rejuvenating American chemical and manufacturing industries, and lowering energy costs for consumers.

Whereas the US thought ten years ago it would soon need to import natural gas to meet it needs, it is now facing the prospect of becoming a major exporter. Meanwhile, the spread of advanced drilling technology around the world has brought the popular “peak oil” hypothesis to disgrace. All of the recent projections, such as those of the International Energy Agency, now forecast that the age of hydrocarbon dominance (including coal) will last several decades longer than previously thought.

This hydrocarbon boom was completely unexpected and came as a surprise to Washington. In fact, had the political class and environmentalists known it was coming, they surely would have done something to stop it. It has been politically convenient for Obama to claim credit for the boom with the general public, even though it is occurring mostly on private and state-managed land rather than federal land. (The President’s bureaucracy continues to strangle or slow-walk permits for drilling on public land.)

But Obama has drunk so deeply of the anti-hydrocarbon Kool Aid that the hydrocarbon boom is a deep embarrassment at some level. He told more than one corporate CEO member of his private sector jobs council (since abolished now that the election is safely behind him) that he has been assured by outgoing energy secretary Steven Chu that America is only a few short years away from completely replacing hydrocarbon energy sources and hence it did not need to be expanding conventional energy production. Word around Washington before the election was that Obama was telling environmentalists privately that he is fully committed to putting a price on carbon in his second term, and he made all the right noises in his second inaugural address and State of the Union speech to assuage environmentalists.

In his inaugural on January 21, Obama promised that “we will respond to the challenge of climate change”, and in the State of the Union a few weeks later he called for Congress to pass a cap-and-trade bill “like the one John McCain and Joe Lieberman worked on together a few years ago”. But cap-and-trade is not coming back, even if Democrats reclaim the House and hold the Senate in the 2014 elections. House Democrats never want to hear the phrase again; next to Obamacare, voting for the Waxman-Markey cap-and-trade bill was the most unpopular vote they cast in 2009, contributing significantly to their historic wipe-out in the 2010 midterm election. And the White House has specifically ruled out proposing the superior fallback position — a carbon tax — though it is possible Obama would gleefully accept one if Republicans proposed it as a part of a tax reform deal. Republicans may be the Stupid Party much of the time, but they aren’t completely suicidal. The likelihood of any climate legislation passing the Republican House is as remote as Republicans suddenly declaring their love for Obamacare.

So what options remain for Obama?

Full essay