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Obama’s Ideological Energy Polices Costly & Have Not Worked

March 31st, 2011
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03.31.2011 original publishing date
01.29.2012 update (reflects #1 & #2 bestselling vehicles in USA for 2011 – both TRUCKS)
03.22.2012 repaired broken links
05.03.2013 minor edits, numbered [brackets] added for easier referencing

Oil-Gasoline Chart (March 2009 to March 2011)

Oil prices have more than doubled since Obama took office (Chart: Courtesy Gasbuddy.com)

Obama’s Ideological Energy Polices Costly & Have Not Worked

original article written by Net Advisor

WASHINGTON, DC. On or about August 3, 2008 Candidate Obama and VP Candidate Biden came up with a “Fact Sheet” (Local PDF) promoting a “New Energy for America.” The proposal is purely fantasy. This article checks the facts on the Obama Administration’s Energy policies and goals. They haven’t done much better than past Administrations as the same rhetoric has been around for over 35 years.

[1] One of the Longest and Most Over-used Promise in American Politics
Every modern politician has talked about reducing American’s dependence on foreign oil; and all have in a word – failed. Along with lower taxes, and less government, this is probably one of the most overused phrases in American politics.

“Call to Cut Foreign Oil Is a Refrain 35 Years Old.”

— Source: New York Times, 02-01-2006 (View PDF)

The above report was published in 2006, making this let’s get off being dependent on foreign oil rhetoric now 40 years old.

Possibly, the most accurate statement in the Obama 2008 energy plan is, “Achieving this goal will not be easy.” Obama’s energy plan said it “will” – not that it could, or it may, or it might, but it “will” do the following:

[2] Obama Energy Plan (2008):
“Provide short-term relief to American families facing pain at the pump” (Source: Obama’s Energy Plan – PDF).

Oil prices have increased about 170% since Obama took office. On January 20, 2009 U.S. Crude for February delivery was $38.74 barrel in NY Trading (Source: Bloomberg, 01-20-2009). As of 03-30-2011, U.S. Crude was trading at $104.70 a barrel (8:53 AM Eastern Time) (Source: Reuters). Thus oil prices have rocketed some $65.96 a barrel or up 170% since Obama took office.

[3] Obama Energy Plan (2008):
“Help create five million new jobs by strategically investing $150 billion over the next ten years…” (Source: Obama’s Energy Plan – PDF).

Although there is still time to try and create 5 million jobs over the next 8 years in the 10-year plan, however the Obama Administration really tried this already with no success. Obama added some $3 Trillion in economic spending and stimulus during his first two years in office.

Obama’s Job Creation Result Thus Far:
As of October 2010 “private sector has shed some 2.9 million jobs while the federal government has grown by 40,000.”

One might ask that if $150 Billion spending could create 5 million jobs (that’s $30,000 cost to create one job), shouldn’t $3 Trillion in spending create utopia?

[4] Obama Energy Plan (2008):
“Within 10 years save more oil than we currently import from the Middle East and Venezuela
combined” (Source: Obama’s Energy Plan – PDF).

We already receive most of our oil from Canada and Mexico. In fact the U.S. has increased net imports of oil from 12 out of 15 countries from period ending March 30, 2010 to 2011. The only decrease of oil imports in the middle-east was in Iraq (Source: EIA/ U.S. Department of Energy – PDF).

Sure, we have more time to try and change this, but thus far Obama has increased our dependency on foreign oil along with higher oil prices.

[5] Obama Energy Plan (2008):
“Put 1 million Plug-In Hybrid cars – cars that can get up to 150 miles per gallon – on the road by 2015, cars that we will work to make sure are built here in America” (Source: Obama’s Energy Plan – PDF).

This is more fantasy ideology, rather than something that will actually happen. It’s like saying by 2015, everyone who votes for me will win the lottery. America undoubtedly would love to have cars with great gas mileage, but they clearly don’t want to drive a tiny aluminum box.

Despite all the Obama tax credit incentives and the bailout of GM and Chrysler what exactly is the best selling automobile in America last year?

The Ford F-150 Truck [Source: Autos.AOL (PDF)]

In fact, regardless of gas prices, the Ford F-series trucks have been the best selling vehicles in 2010, 2009 and 2008. Also in 2008 50% of top 10 cars sold in America were foreign cars. That number increased to 60% by 2009 [Source: USA Today (PDF)]. By 2010, foreign cars again represented 60% of the top 10 U.S. auto sales.

Despite all the green-hybrid talk in Washington DC, last year 3 out of the 4 top 10 selling American cars were — large trucks [Source: Autos.AOL (PDF)].

Jan 2012 UPDATE: The best selling vehicle in the USA for 2011? Again, it’s the Ford- F-150 Truck (Source: Forbes). The #2 best selling vehicle in 2011? The Chevrolet Silverado 1500 TRUCK (Source: Edmunds). The Silverado gets (up to) a whopping 15 MPG in the city (Source: Edmunds).

[6] Cash For Clunkers
The Obama Administration also tried to stimulate U.S. auto sales with its Cash for Clunker’s Program. The idea was to get rid of older, more polluting and less fuel inefficient cars off the road.

What was the result of Obama’s tax incentive to buy “greener” American cars?

Answer: Federal tax dollars helped people buy more foreign cars.

Obama’s desire to put 1 million plug-in cars on the road is going to be costly if we are to have American plug-in cars. The prize of this turn-around effort by GM is the hyped Chevy Volt. The problem – it is not widely available and costs a whopping $41,000+ for this American made hybrid car. The other problem with plug-ins right now is that they are pricey for what you get, they can’t go very far in terms of distance, and if you have a family, it might be a little tight in some of those vehicles.

[7] $100 a Mile?
Plug-in cars may not run on gasoline, some hybrids do but regardless, the cost to owning 100% electric vehicles isn’t cheap.

“Plug-ins estimated retail price is higher than that of corresponding conventional vehicles. The difference in price depends on the size of the battery. Every additional 10 miles of vehicle range in electric mode adds about $1,000 to the cost.”

— Source: Institute for the Analysis of Global Security

As much as Obama wants to take the lead in plug-ins, it appears that China is already charged up for the top spot. According to Hybridcars.com, “China (not the USA) is likely to become the world’s largest market for plug-in electric vehicles.” China will invest some $14.7 Billion in this effort.

[8] Obama Energy Plan (2008): Government Control & Wealth Redistribution
“Barack Obama and Joe Biden will require oil companies to take a reasonable share of their record-breaking windfall profits and use it to provide direct relief worth $500 for an individual and $1,000 for a married couple” (Source: Obama’s Energy Plan – PDF).

This is probably one of if not the most ridicules goal for an energy policy: Force public companies (specifically) the oil companies to hand over some of their profits to everyone. If that doesn’t define socialism and redistribution of wealth I don’t know what does.

House Democrats attempted to control how publicly held energy companies use their shareholder’s money. A bill was proposed that would “create a 25 percent windfall profits tax on companies that don’t invest in renewable fuels or electricity production” (Source: CS Monitor).

This is nothing short of government control, regardless of the end result. Government cannot bully publicly held companies to running their business in a certain way just because the government says so. Government attempts this anyway by adding high regulation on business. The net result of this government action is higher consumer prices, and jobs losses to overseas where regulation is not so stringent.

“Federal rules alone in the past few years have exploded, and the Chamber finds it cost our economy $1.7 trillion. State labor and employment laws are costing the U.S. 700,000 jobs…”

— Source: Washington’s State Chamber of Commerce, 03-04-2011 Report

As much as there apparently is a large number of people calling for more government regulation, that will not help create American jobs.

When it comes to gasoline, we all don’t like to pay too much for it. Political activists want us to believe that oil companies are evil, but remember we choose what vehicles we drive. That’s the American way. Not that we HAVE to buy only the cars and products government wants us to buy; we buy what we want.

The oil profit redistribution just didn’t happen. Corporations are already subject to tax. The government cannot levy a special tax on anyone based on the type of business they do – that would be discriminatory. Public companies such as many of the oil companies pay out some of their profits in the form of dividends to stock holders, so if one wants to profit from higher oil prices, perhaps one might buy stock in oil-related companies.

[9] $5.00+ Gas?
In 2009, the government proposed a 23% National Sales Tax under the bill called, “Fair Tax Act of 2009.” It would do away with the federal income tax, employment tax, estate and gift tax. We would still have state income taxes, and state sales taxes which constitutionally, the federal government has no power over states. The bill would also create a new government bureaucracy called the Sales Tax Bureau.

This is another move to create a national socialist controlled environment. The government can then increase these taxes every so often to meet its huge deficit spending until the government centralizes and controls more and more of U.S. economic infrastructure.

How would you like to pay a 23% gas tax on top of your state sales tax? If such legislation passed, in high-taxed states such as California, one would currently expect to pay in the neighborhood of $5.31 per gallon for gas [Math: Say $4.00 gallon plus 23% Federal tax ($0.92) plus 9.75% sales tax ($0.39 in Los Angles) =  $5.31 per gallon for gas].

[10] 34% Car Tax?
If that isn’t bad enough, can you imagine how much more you would have to pay for that green car or any car with a 23% federal tax on top of your state tax? Using Los Angeles, CA as an example purchasing a 2011 Prius (with a base price of $23,050): One would pay $5,301.50 in federal taxes (23%), $2,247.38 local sales tax (9.75%) not including vehicle registration fees of $334.00 (PDF) giving a total of $7,882.88 in taxes (or 34.19% net tax) on a $23,050 hybrid car! [Math: $7,882.88 total taxes divided into $23,050 vehicle price = 34.19% taxes due on this car].

[11] Obama’s Energy Plan – Running on Empty?
Perhaps one can try and give credit to Obama for being optimistic, but in reality, Obama has not done well with his overzealous energy policies.

According to CNN:

1. Obama actually proposed to open up new drilling. BP had their oil spill in the gulf about 30 days later. A managing director at research firm ClearView Energy Partners, Kevin Book called Obama’s talk about new drilling, ‘a bit of a ruse.’

2. Obama’s 2012 budget (deficit plan) includes $36 Billion for nuclear energy research and development. “Within weeks (of Obama’s plan) at least three reactors at a Japanese nuclear plant were on the verge of a meltdown.”

3. Obama also sought to have an initial $53 Billion for a high speed rail program. States have been returning the rail money due to the high control and requirements Obama has placed on states who accept any federal money for this program. Since then, Obama’s Energy Czar Carol Browner called it quits.

As for the rest of Obama’s 2008 Energy Plan reads much like the latest Obama Energy plan. With perhaps the exception of nuclear energy development, most of Obama’s 2008 and 2011 energy plans are mostly ideological and overly ambitious. They have not worked, are not realistic, nor practical, are full of new government controlled programs which in the end, will only cost tax payers far more for energy and possibly more in taxes than we are paying now.


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Graphic courtesy of Gasbuddy.com, gas station image modified netadvisor.org, empty gas tank image public domain.

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