In his State of the Union speech Tuesday night, President Obama called for “a future where we’re in control of our own energy, and our security and prosperity aren’t so tied to unstable parts of the world.” The President touted record levels of domestic oil production – the highest in eight years. But with only 2 percent of the world’s oil reserves, Obama said the country needs an “all-out, all-of-the-above strategy that develops every available source of American energy.”
Toward that end, Obama announced the opening of 75 percent of potential offshore resources. He also called for an increase in domestic production of natural gas, adding that companies drilling on public lands would be required to disclose the chemicals used in the drilling process, known as hydraulic fracking.
Obama’s energy proposals drew sharp criticism from both sides of the political aisle. Republicans argue that Obama claims to be for energy, but isn’t, as evidenced by his decision to stop the Keystone pipeline. Environmentalists were pleased with that decision, but raised big concerns over the safety of fracking. Obama conceded that lawmakers are too divided to pass a comprehensive plan to fight global warming, but said he wouldn’t “walk away from the promise of clean energy.”
What would it take to really make the U.S. energy independent? Is there as much natural gas within our borders as Obama claims? Can we get to it? Can it be done safely? Would investments in renewable and clean energy be good or bad for the economy and job creation?
Philip Verleger, Visiting Fellow, Peterson Institute of International Economics; Founder of PKVerleger LLC; former David Mitchell Professor at the Haskayne School of Business at the University of Calgary
Benjamin Zycher, Visiting Scholar, American Enterprise Institute (AEI); Adjunct Professor of Economics and Business at the Martin V. Smith School of Business and Economics, California State University, Channel Islands