Jim McTague devotes his latest Barron’s “D.C. Current” column to President Obama’s efforts to execute an about-face on oil and gas drilling.
He’s scraping off his anti-oil war bonnet in advance of the election and taking credit at every campaign whistle-stop for increased U.S. oil and gas production, even though most of the drilling is occurring on private, not federal, land. The reason for Obama’s about-face is that the election is shaping up to be close. Since the public largely favors exploiting all of our domestic gas and oil resources, on and off shore, Obama feels he must lip-sync a version “drill, baby, drill.”
A few voters might be fooled by the president’s rapid lane change, but investors remain unimpressed. His change of tone hasn’t affected energy-stock prices. …
… One political change that might make a significant difference for the energy sector, however, would be Obama’s defeat. Investors who believe that will happen should begin wading into the sector now. Obama might already have lost the White House for failing to deliver his promised turnaround in the economy. Many voters view his stimulus as a flop. They object to the government’s rewriting of health-care policy. They perceive Obama to be a job-killer, not a job creator, for backing speculative green-energy ventures run by his supporters and obstructing the creation of tangible jobs by not supporting energy projects like the Keystone Pipeline from Canada and drilling off of our coasts. Many voters were angry about all of this in 2010 and, according to most polls, after two years they remain angry.
Oil and gas executives aren’t assuaged by the president’s recent public turnabout. His administration in their view remains a costly bottleneck to the exploration and development of new fields off of our coastlines, in Alaska, and on federally owned lands in the west. Obama also wants to hike industry taxes significantly, in part to reduce the pricing advantage of petroleum fuels over renewable energy.
