PrintJanuary 13, 2010
Shake and Take
Over the past several years, the president has repeatedly vowed to make the United States less dependent on foreign sources of oil. From the actions of Ken Salazar and his lieutenants, however, it would seem that the Interior Department's main mission is to reduce domestic energy production.
Surely, that is the effect of Salazar's announcement on January 6 that his department intends to slow the permitting process for energy projects on federal lands. The "fast-track" procedures approved by Congress in 2005, lauded by consumers as a way to increase production and reduce costs, are now to be replaced by the requirement of more paperwork, inspection, and layering of bureaucratic approval.
As our economy recovers, we are going to need cheap and reliable sources of energy. Almost providentially, at the very moment in our nation's history when this supply is most in need, a solution has presented itself: vast new discoveries of shale gas, and the development of the technology to release it. With the discovery of enormous fields of natural gas in Texas, Louisiana, Pennsylvania, and New York, as well as in other states and offshore, America is now the Saudi Arabia of natural gas. If one truly wished to reduce the nation's dependence on foreign energy, the only requirement would be for government to step aside and allow the free market to develop these remarkable reserves.
Unfortunately, this is the last thing we can expect from the Obama administration, which has been busy from day one tightening restrictions on domestic production of oil and gas. Most Americans like to believe that their president is fundamentally honest and sincere, so they must be perplexed by the contradiction between this particular president's actions and his words. As recently as December 8, 2009, Obama reiterated his pledge to reduce dependence on foreign oil, yet at the same time he was working feverishly to curtail domestic production of both oil and natural gas. An ordinary citizen would have to conclude that Obama is deranged.
Unfortunately, our president is not deranged, but cunning. Just as he has done with health care suppliers, Obama is putting the squeeze on domestic energy producers by tightening regulation and raising taxes and royalty fees. The intent of this shakedown is two-fold.
First, by threat and intimidation, Obama hopes to stifle political opposition from a powerful industry group. There might even be energy outfits, such as a major Midwestern electric utility, willing to support Obama's radical agenda if offered a carrot along with the usual stick. Second, by confiscating profits, government will increase revenue with which to expand its client base of voters.
The Chicago shakedown is crude but effective: Intimidate those who are productive, force them to hand over a portion of their earnings, and redistribute those funds to those who are not productive but who nonetheless vote. The result is the establishment of a dependable client base of supporters whose welfare benefits are maintained at the expense of productive businesses and wage-earners.
Ultimately, of course, this system collapses as productive citizens depart and the tax base dwindles. Under generations of Democratic Party leaders, Detroit came to resemble a bombed-out Beirut, while Chicago earned a reputation as one of the least business-friendly cities in the country. The problem is that with Obama as president, there is no place to hide. No matter that every city will come to look like Detroit or Chicago. The important thing is to secure permanent control by rendering more than half of the population dependent on government, and to accomplish this feat requires tighter regulation of all major sectors of the economy.
Energy and health care are key targets of Democratic "reform" -- not because they need reforming, but because they present an opportunity for extortion on an unprecedented scale. This is why Obama has declared the need for "comprehensive" health care reform and "a comprehensive energy plan." Obama's recent appointment of Wilma Lewis as Assistant Secretary for Land and Minerals Management is highly significant in this regard. Lewis has no experience in the production of any form of energy or mineral, but she has a lengthy résumé in the area of regulation and enforcement. As Obama's new "lease czar," Lewis will oversee policies affecting a broad array of energy and mining operations on federal lands, including the Outer Continental Shelf. According to the Department of the Interior, she will ensure that these resources "are managed to meet the needs of the American people."
It would seem that these needs do not include a return to endless environmental review and bureaucratic approval, but this is precisely what Obama and Salazar have been at since the start of this administration. Nor do the needs of the American people include ending the royalty-in-kind program that has simplified payment and avoided litigation for energy companies. Further harm will come from the imposition of severe restrictions on licensing of mountaintop mining (a licensing process that is supposed to be the prerogative of the states, but that Obama plans to usurp through new federal rules and an unrealistic interpretation of the Clean Water Act). Likewise, the public's needs are not served by blocking development of an Arizona copper mine that would supply one-fifth of the country's needs. All of this regulation has but one purpose: to put the squeeze on powerful interests and force them to play ball. Once the revenues of these companies are under the control of government, they can be exploited for political purposes. This is what the president means by a "comprehensive energy plan."
For Obama and his Chicago cronies, shakedown is business as usual. Under the pretext of reform, the Democratic Party is attempting to take over every major sector of the economy and to manipulate it for political gain. It is naïve to imagine that these takeovers are motivated by a desire to improve the lives of ordinary Americans. The cost of health care, energy, and other basic needs are to be increased for one simple reason: to seize the profits of private businesses and redistribute funds to political supporters. It is a calculation that even Timothy Geithner, not known for his skill at calculating simple matters like tax returns or SEC filings, can appreciate.
Dr. Jeffrey Folks taught for thirty years in universities in Europe, America, and Japan. He has published many books and articles on American culture and politics.
