Political opponents were quick to criticize President Obama's speech on energy, delivered Wednesday at Georgetown University, but energy experts say much will depend on how the ideas expressed in the speech are implemented through laws and regulations.
In his energy speech, President Obama called for sweeping changes in U.S. policies that would reduce oil dependence by a third by the year 2025, put more emphasis on cleaner fuels like natural gas and renewables, and at the same time reduce greenhouse gas emissions that are linked to global warming. Some Republican senators from the oil-rich Gulf of Mexico coastal region were quick to accuse the president of not offering anything new. Many of them argue for opening more areas to drilling and reducing regulatory delays that they say impede oil exploration.
President Obama said he has not forgotten the devastation caused by last year's oil spill in the Gulf, and that new projects need to be examined carefully and carried out under new regulations that are designed to make them safer. "What we learned from that disaster helped us put in place smarter standards of safety and responsibility," he said.
Energy experts see some promise as well as a few problems with what the president said.
Eric Smith, who is associate director of the Tulane Energy Institute at Tulane University in New Orleans, said the moratorium on new drilling imposed after last year's accident, as well as new regulations, have slowed energy development, in spite of what the president says.
"He points to the things like an increase in permits for shallow-water drilling without making the point that shallow-water drilling does not produce oil, it produces gas. Deep-water drilling produces oil. He points to seven permits being issued. In fact there were six permits issued and these were only for wells that had been started before the impact of the moratorium," he said.
In his speech, President Obama scolded the oil and gas industry for not producing more from areas where they already hold leases. "Right now the industry hold tens of millions of acres of leases where they are not producing a single drop. They are just sitting on supplies of American energy that are ready to be tapped," Obama said.
But Eric Smith says this rhetoric misleads the public about the complexities of the oil and gas industry and the time it takes to develop a lease. "The average time from signing a lease to actually discovering oil is about five years, and then it is another five years to design all the equipment to actually produce it. So to sit there and say that the oil companies are purposely not drilling wells on land that they are paying for and that they know there is oil there is disingenuous," Smith said.
But Smith is pleased by what the president had to say about natural gas. Mr. Obama said the United States now has a 100-year supply of gas thanks, in large part, to fracking, a process through which shale deep under ground is fractured with high-pressure water and chemicals so that it will release gas. Some environmental groups say the process could contaminate water supplies, and the president said those concerns must be addressed. But Eric Smith says the president is right to move forward in spite of those concerns.
"I think he is on the right track when he talks about natural gas, we have a lot of natural gas, and I frankly think the complaints about fracking are overblown. To me, what they should be focusing on is what happens to that water that is used for fracking after it has done its job and is removed from the well bore," Smith said.
The Tulane University professor also sees promise in the Obama administration's continuing commitment to nuclear power, in spite of the accident in Japan that has caused public support for nuclear energy to plummet in recent weeks. Eric Smith says regulations aimed at addressing environmental concerns have delayed the building of new plants, and that the United States also must approve plants for reprocessing fuel as the French do, rather than storing used fuel all over the country in storage facilities.
"The French can reprocess their fuel, reduce the amount of waste they have to deal with, and produce a lower overall cost for electricity than we can because they reprocess the fuel. We persist in storing it in the very sort of tanks that you saw cause problems in Japan," Smith said.
In the end, Smith says, the success of President Obama's energy vision will depend on what Congress approves and how the goals are implemented.
