Thanks for Small Favors, President Obama

On Feb. 28, just after Interior Secretary Salazar declared that he was not satisfied with Gulf drilling safety standards, President Obama's drilling czar, Michael Bromwich, announced that a permit had been approved to resume deep-water drilling 70 miles off the Louisiana coast. Not a new permit, mind you, but one for a project that had already begun drilling before the Deepwater Horizon accident in April 2010. In the months ahead, Bromwich hinted, there might be more approvals, even approval for a new deep-water well. Maybe so, maybe not.

That's the way it works with crony socialism. Just to show how business-friendly he can be, Obama agrees to the resumption of drilling on one deep-water well. That well, operated by Noble Energy, was approved after Noble signed up capping equipment produced by Helix Well Containment Group that met the Bureau of Ocean Energy Management, Regulation, and Enforcement's new standards.

If the Bureau of Ocean Energy Management, Regulation, and Enforcement ("BOEMRE") seems like a mouthful, it's the same agency that used to be known as the Minerals Management Service ("MMS"). In line with its expanded appellation and newly appointed director -- a veteran of the Clinton Justice Department -- the agency has taken on a much more aggressive role in regulating offshore drilling, so much so that practically no drilling has taken place.

This is the way bureaucracy operates under crony socialism. Permits trickle out at a pace decided by a bureaucrat who has spent his entire career in government at the direction of a President who has never worked outside government (inside government either, many would say). Once government controls the means of production and decides how much production and on what terms, the private sector has in effect been nationalized. Having been stifled by this kind of regulation, businesses have to decide whether to limp along in the manner of state-regulated utilities or pack up and leave. In the energy sector, a lot of companies have been leaving. Deep-water rigs have departed for Africa and Latin America, and new exploration and production is relocating abroad.

Lest anyone think that Obama has suddenly become energy friendly, let's review what else he has done in the last few months. Along with his refusal to approve any new deep-water wells, there's the small matter of increased taxes. At a time when the price of oil has exceeded $100 a barrel, the President's FY2012 budget includes a reduction of $44 billion in funds to promote energy independence. The proposed budget would entirely eliminate the current Oil and Gas Research and Development Program while significantly increasing funds for alternative fuels that meet less than 1% of our nation's energy needs.

Those cuts for fossil fuels compare with a 38.5% increase in education spending. Maybe that's because oil-field workers aren't big contributors to the Democratic Party the way teachers' unions are. But piling new taxes on oil companies while boosting teachers' salaries is not going to make America energy independent. You won't get very far pumping a lesson on Women's History Month into your tank.

Meanwhile, in yet another power grab, Obama's EPA wants to slap costly new regulation on refineries and other industrial boilers. Its initial job-killing plan was estimated to cost American workers $3.9 billion annually. EPA Director Lisa Jackson seemed surprised at the level of opposition but subsequently offered a new plan estimated by the EPA to be 46% less expensive.

Amazingly, Jackson claimed that the new plan, at about half the cost, would accomplish essentially the same environmental goals as the first one. That being the case, why wasn't the less costly plan offered to begin with? Since it seems to pull these plans out of thin air whenever it is politically expedient to do so, maybe the EPA can come up with a third plan that is less costly still.

In fact, Jackson's giveback is typical for this administration. What the Obama EPA seeks is not a reasonable level of regulation -- that is to say, minimal regulation necessary for public welfare -- but regulation so far-reaching that private businesses operate at the behest of bureaucrats. Having mugged American business and threatened to strip them of every dime of profit, the agency now decides to make nice and allow some American corporations to subsist within a system of state corporatism.

But not those that produce or burn fossil fuels. The revised regulations on industrial boilers carved out an exemption for schools, hospitals, and some small businesses but did nothing to ease the burden on larger companies. Why is it that teachers, once again, are suddenly exempt from the burden of regulation while energy companies are not? Teachers are being rewarded for being good little Obama comrades, while those connected with fossil fuels are blacklisted. Maybe it's because energy companies actually produce something of value and have the ability to create private sector jobs independent of government. Evidently no one in the Obama administration wants to see those kinds of companies prosper. 

Underlying Obama's energy policy is the goal of de facto nationalization of all major sectors of the economy. Drilling in the Gulf may be allowed to resume, although gradually, but Obama has not backed down on his socialist agenda. His latest budget doubles down on subsidies for green vehicles and alternative fuels. He continues to rally support for alternative fuel mandates, a backdoor means toward carbon emissions control. And Obama's friends at the Environmental Resources Defense Council are promoting CAFE standards of 60 mpg by 2025, a goal that would run the American auto industry into the ground a second time and bankrupt consumers as well. The only thing that has changed is that, with gas prices climbing over $4 a gallon, Obama needs cover through the 2012 election for an energy policy that is not working.

I suspect that more deep-water approvals are forthcoming, but not many and slowly. Even as a bipartisan resolution has been introduced in the House calling for faster permitting, there is no leadership on this issue from the White House. Or rather, there is leadership in the wrong direction. Obama managed to shut down deep-water permitting in the Gulf for an unprecedented ten months, then act like Santa Claus when he re-authorized a permit that had already been granted. What happens when he actually approves a permit for new drilling? He'll make it sound like we're on the way to $2 gas when, under his plan, we're on the way to no gas at all.

A lot of voters are unhappy because they know that Obama-style socialism is not working. They know that fewer Americans are working, prices are going up, and government debt is out of control. That's why they voted Democrats out of office in record numbers last November. Obama is attempting to placate the public by acting like he has learned his lesson and is willing to compromise. But approval for resumption of one deep-water well, or of a few wells in the coming months, is not compromise. It's a cynical ploy designed to deflect attention from the continuing takeover of the energy sector.

Jeffrey Folks is the author of many books and article on American culture.