Energy Policy? What Energy Policy?

Some dish detergent and hot water is all it takes to clean up a pelican that is being smothered by spilled crude. Nobody knows how to clean up the Obama administration’s energy policy, which is likewise floundering in goo.

The president is back on the Gulf Coast this week to show everyone how involved he is in managing the problem, and how very, very angry he is about the ongoing spill. We are supposed to see that he is doing something about it.

He is doing a lot of things. The problem is that the things he is doing, taken together, don’t make any sense.

Obama has called on Congress to roll back “billions of dollars of tax breaks to oil companies so we can prioritize investments in clean energy research and development.” Legislative leaders are practically tripping over one another to comply so they, too, can show how tough they can be on that dirty oil industry. Make things expensive enough or legally and financially risky enough, and we can get the oil industry to do its drilling elsewhere.

If Obama actually wants to end offshore drilling, his proposals might be coherent. But, less than a month before the Deepwater Horizon blowout, the president actually called for expanding offshore drilling. In waters off northern Alaska, 130 million acres would have been opened for exploration. The plan also would have opened 167 million acres of ocean along the Atlantic coastline, putting an end to the long-standing moratorium that remained intact through Texas oilman George W. Bush’s eight years as president.

Obama’s offshore drilling plan is now, officially, toast. At the end of May the administration announced that it was putting all applications for exploratory drilling in the Arctic on hold until 2011 and extending a moratorium on permits to drill new deepwater wells for six months. The government also has called an indeterminate time-out on drilling in shallow coastal waters because, at the moment, nobody knows what the president wants to do about shallow-water drilling.

So we’ll need to look for oil someplace else for the time being. But Obama is also against increasing oil imports. “Without a major change in our energy policy, our dependence on oil means that we will continue to send billions of dollars of our hard-earned wealth to other countries every month, including countries in dangerous and unstable regions,” he said.

If the president doesn’t want to get oil here and he doesn’t want to get it there, the only alternative is to increase energy production from other fuel sources. In his Jan. 27 State of the Union address, Obama expressed hope for “a new generation of safe, clean nuclear power plants.” In February his Department of Energy proposed $36 billion in new federal loan guarantees for nuclear power. “It’s ironic, but Obama could end up being the biggest pro-nuclear power president since Dwight Eisenhower,” said Henry Sokolski, executive director of the Nonproliferation Policy Education Center.

But, while Obama may be in favor of building more nuclear power plants, he is against doing anything to find a way to store the hazardous waste those plants will produce. By nixing funding earlier this year for the Yucca Mountain repository program in Nevada, Obama pleased Senate Majority Leader Harry M. Reid (D-Nev.) and scored himself some points in a swing state, but he also eliminated this country’s only real plan for dealing with its nuclear waste.

A Department of Energy statement on the termination on the Yucca Mountain project included the comment, “The President…has made it clear that the Nation needs a better solution than the proposed Yucca Mountain repository.” So far, Obama has given no indication as to what that solution might be.

I suppose, given his lack of prior executive experience, it is no surprise that this president has trouble making decisions. He probably is tempted to call for a commission to determine national energy policy, but he has played that political card so often that he would risk inducing actual laughter.

The president’s most effective recent approach is the “beat on BP” strategy that he is scheduled to present to the nation tonight in his first televised address from the Oval Office. Though the details remain to be seen, the president apparently wants BP (BP) to turn over a sizable chunk of its cash to someone independent of the company (though not necessarily independent of Obama’s government) to dole out to the spill’s real and alleged economic victims. I very much doubt the administration’s claims that it has the legal power to enforce this demand, but it may not matter. BP just might be willing to go along anyway, especially if it can find a way to cap its financial exposure at some ultimately manageable level.

Otherwise, Obama’s current energy plan is a rhetorical mishmash of verbiage about green development and carbon caps which says almost nothing useful about how we are going to fuel our vehicles, heat our homes and power our gadgets. If we could turn the president’s hot air into motor fuel or electricity we would be in good shape, but that isn’t in the cards.

Despite his lack of a plan, Obama vows to somehow produce energy legislation this year. We can only hope that the addition of Scott Brown’s Republican vote in the Senate will prevent the president and his party from afflicting us with an energy “policy” that has no idea where it wants to go or how it wants to get there.

About Larry M. Elkin 525 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

Visit: Palisades Hudson

2 Comments on Energy Policy? What Energy Policy?

  1. I agree with most of your article, except for Obama's "afflicting us with an energy “policy” that has no idea where it wants to go or how it wants to get there." Obama and his comrades actually know very well where his "energy policy” will take us.

    Obama's "green energy tax" (Cap and trade) represents huge taxes and cost increases, which will hurt mostly the poor and the middle class. Cap and trade will give dictatorial powers to Obama and will further enrich his billionaire friends (Gore, Soros, Goldman Sachs, Obama’s Chicago Climate Exchange friends, GE, the United Nations, etc.) — all at our expense and at the expense of our children and grandchildren.

  2. Obama and his comrades know how bad their "green energy tax" (cap and trade) would be for us, but they want to force us to swallow it because they expect to further empower and enrich themselves at our expense.

    Numerous economic studies support a leaked memo from the Obama administration that said restricting carbon dioxide emissions will have a severe negative impact on the U.S. economy.

    Applying the U.S. Energy Information Administration’s economic forecasting model, Science Applications International Corporation reports reducing U.S. carbon dioxide emissions 70 percent by 2050 could kill 4 million U.S. jobs, cause gasoline and electricity prices to more than double, and reduce household income by more than $7,000 each and every year.

    IMPEACH Obama before it's too late!

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