Barack Obama's oil policy will be vitally important for the future of America. Under George W. Bush, the problems associated with US oil dependence increased as the President refused to deal with with the huge level of US oil consumption. President Obama, with his New Energy for America Plan, looks poised to attempt, at least partially, to rectify the mistakes of his predecessor.
Recognizing the centrality of the issue of oil dependence is important as competition caused by increased global demand for oil is likely to be a feature of the future global oil markets, which will make America's position as the top world oil consumer – consuming 25% of the world's oil – increasingly untenable.
New Energy For America Plan
During the Presidential election campaign Obama released the “New Energy for America Plan” (NEAP) which has since gone on to form the bedrock of his oil policy. When announcing the initialization of the NEAP, in his first address as President, Obama said “America's dependence on oil is one of the most serious threats that our nation has faced. It bankrolls dictators, pays for nuclear proliferation, and funds both sides of our struggle against terrorism. It puts the American people at the mercy of shifting gas prices, stifles innovation and sets back our ability to compete.”
Fuel Economy Standards: Increasing Energy Efficiency
One of the main strands of the NEAP is increasing the fuel efficiency of cars and trucks. NEAP plans to see an increase of 4% in efficiency each year, which will see fuel efficiency standards double in the next 18 years. It also plans to offer US car companies $4 billion to help them retool their manufacturing facilities so as to be able to produce more energy efficient car.
Alongside increasing fuel economy standards, the NEAP pushes for the increased utilization of petrol-electric hybrid technology, hoping to build 1 million by 2015. These cars – which are hoped to be capable of getting up to 150 miles to the gallon – will use are far greater proportion of electricity than current hybrid models and will be capable of being “plugged in”. In order to promote the take-up of these cars by US consumers, Obama plans to offer a $7,000 tax incentive on advanced technology vehicles.
Increase Domestic Oil Production: Use it or Lose It
NEAP also looks to improve American oil security by increasing domestic drilling so as to reduce oil imports. In order to do this, the NEAP proposes a “use it or lose it” policy towards the 68 million acres of land (40 million offshore) that oil companies have leased but are yet to drill on. Obama has also proposed to increase domestic oil production by establishing a process for identifying any potential infrastructural or procedural problems in the drilling of American shale deposits and in the Alaska National Petroleum Reserve.
A National Low Carbon Fuel Standard: Greater Use of Biofuels
President Obama plans to implement a national low carbon fuel standard that will see the carbon content of transportation fuels decrease 10% by 2020. In order to do this, Obama supports the greater production of biofuels (60 billion gallons more by 2030) so as to allow higher percentage ethanol fuel mixes. This will tie in with the 20-10 plan made by former President George W. Bush in 2007, which planned to see biofuels account for 20% of American fuel.
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