Over the last week, the Puget Sound area has suffered power outages for thousands of people due to snow, rain and wind. Some people have been without power for days at a time. Others have had the power go out off and one several times. These power outages have emphasized how important power is to modern life. Heat, water, lights, phones, TV and internet access have all been affected by the power outages.
President Obama has an energy policy of encouraging renewable energy sources such as wind and solar to the exclusion of other domestic energy sources. Currently, wind and solar energy represent less than 5% of the total energy consumption in the US. 84% of energy in the US is generated by fossil fuels such as oil, natural gas and coal. The majority of the remainder comes from nuclear and hydro power. The President’s policy has included forbidding domestic offshore drilling (but encouraging offshore drilling in places such as Brazil), denying the permit to build the Keystone XL pipeline and working to run the coal industry out of business. His policy is to reduce the amount of domestically generated fossil fuel energy generated.
Due to the current prevalence of fossil fuel power generation, his energy policy is likely to require the US to continue to import much of the oil and other fossil fuels we will consume. This is likely to raise electricity rates and lead to brown outs on a regular basis in various parts of the country. Having just lived through sporadic power outages, residents of the Puget Sound can now remember how dependent modern life is on electricity.
Another effect of the President’s energy policy is to slow economic activity and increase unemployment in the country. Lower than otherwise possible domestic energy production will lead to higher gas and electricity prices and will inevitably slow down economic activity and lower job opportunities.
One interesting new twist is the President’s State of the Union address where he claims the government should get credit for the natural gas boom in the US. Industry officials disagree with his assertion and no one in the fossil fuel industry feels any warm and fuzzy towards this administration. Until the speech, they assumed the feeling was mutual.
In this year’s election campaign, the unions and Republicans will likely make a case that the Obama Administration has hurt the economy and job creation with its energy policy. The Republicans will say Obama’s policies have raised energy prices and constrained domestic energy development. The State of the Union speech was the first counterclaim.