As Gas Prices Rise, Obama Delays New Domestic Drilling

Will the President Finally Expand Permits for Offshore Drilling as Businesses and Families Feel the Price Pinch?

Fueled by unrest in the Middle East and North Africa, gas prices hit record levels this week, placing additional financial strain on families and businesses struggling through the economic recovery:

“High fuel prices are putting the squeeze on drivers’ wallets just as they are starting to feel better about the economy. They’re also forcing tough choices on small-business owners who are loathe to charge more for fear of losing cost-conscious customers.

“Gasoline prices rose 4 percent last week to a national average of $3.29 per gallon. That’s the highest level ever for this time of year, when prices are typically low. And with unrest in the Middle East and North Africa lifting the price of oil to the $100-a-barrel range, analysts say pump prices are likely headed higher.” (Jonathan Fahey and Sandy Shore, “High Pump Prices Rattle Drivers and Businesses,” Associated Press, 2/28/2011)

Instead of increasing permits for offshore oil exploration to up domestic production and reduce gas prices, however, the Obama administration is continuing to delay the issuance of new permits. This week, the White House authorized its first new permit in months, receiving cynical reactions from job creators:

“Until Monday, federal regulators had not allowed any offshore drilling that had been off limits under the five-month ban against some deep-water exploration, even though the ban ended in October….

“But offshore drilling advocates were doubtful the move would unleash a flood of permits because the project approved Monday was one of 16 under way when the ban was imposed – and therefore faced a clearer path to approval than proposals filed since last year’s oil spill….

“The American Petroleum Institute noted that the government had approved just “one permit for one company.”

” ‘While every permit is welcome news, tightening the screws on domestic oil and natural gas production during a time of increased demand and global uncertainty is a formula for disaster,’ said API President Jack Gerard.” (Jennifer A. Dlouhy, “Deep Drilling Permit Issued for Gulf,” The Houston Chronicle, 2/28/2011)

The Obama administration bottleneck on new permitting persists in spite of extensive evidence of the economic harm caused by the President’s delay in issuing new permits. Obama’s moratorium on offshore drilling caused up to 12,000 lost jobs, sparking outrage from even fellow Democrats like Sen. Mary Landrieau (D-LA):

“Gulf Coast businesses and lawmakers protested the moratorium as unnecessary and harmful to their economy. A federal report said the moratorium probably caused the temporary loss of 8,000 to 12,000 jobs in the Gulf region.

“Sen. Mary Landrieu, D-La., responded by putting a Senate hold on the nomination of a new Obama budget director, Jack Lew.” (David Jackson, “Obama Team Lifts Gulf Coast Oil Drilling Moratorium,” USA Today, 10/12/2010)

Indeed, on Tuesday Federal Reserve Chairman Ben Bernanke warned that a sustained rise in gas prices could emerge as a serious threat to economic recovery. When will Obama get serious about an all-of-the-above energy policy and allow businesses to tap into America’s domestic energy potential?:

“Bernanke warned that a sustained rise in oil prices could pose a danger to economic growth.

” ‘Bernanke’s comments reconfirm what the market’s fear has been since the Libyan situation started,’ King said. ‘Bernanke hasn’t been too concerned about inflation, especially in relation to high commodity prices, so this is the first time he’s outlining a potential scenario with inflation.'” (Hibah Yousuf, “Stocks Drop More Than 1% As Oil Spikes Near $100,” CNN Money, 3/1/2011)