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Is Obama's "All of the Above" Energy Policy Flawed?

If we are looking at the "all of the above" energy stance the U.S. has more publicly taken in recent years, a debate can be made that the move has created thousands of jobs despite displacing many in the coal sector. Another view could also fuel a strong argument that the move has contributed to climate change, which has magnified domestic droughts, cold spells, tornadoes, and twisters (and that's not even going into the devastation that Superstorm Sandy wreaked on the Northeastern U.S.). Which argument is right and what should we do next as a country when it comes to energy?

From the perspective of being purely energy independent, the 'all of the above' strategy has been a success thanks largely to unconventional drilling techniques that are effective, but also highly controversial. However, if we are trying to wage a war on carbon, U.S. energy policy needs to swiftly focus more on renewables, including next-generation biofuels like the ones being created by refiners Valero (NYSE: VLO  ) and Tesoro (NYSE: TSO  ) . The U.S. also needs to establish more support for the nuclear industry and create energy storage solutions that can help make solar and wind power more constant. 

Five years ago the American people were promised an energy policy. That policy was put on the backburner for what is widely referred to as "Obamacare," a health care policy that has had its fair share of criticisms. I don't want to be too hard on President Obama here since even without a full-blown energy policy he been a staunch supporter of lowering our dependence on fossil fuels through the advancement of alternative energy sources. Yet support needs to come from policy and action, not just words. 

We keep hearing about natural gas, but what is the social cost of fracking? Is the U.S. being too shortsighted when it comes to declaring natural gas our nation's energy savior? Quite frankly, I believe the bridge mentality is flawed, and the U.S. needs to concentrate on what's on the other side of the bridge. It is my view the government shouldn't be in the business of picking winners, but it should also stop tax benefits for oil companies and instead focus on an energy policy with a clear direction: sustainable, renewable energy that not only moves the country toward a carbon-neutral society but pushes the envelope of innovation to strive for a carbon-negative future as well.

The government needs to establish the rules so private equity investors can invest in renewables with confidence. It's hard to kick a football through a moving goal post, but that's exactly the case with endorsing ethanol and then reducing ethanol requirements or encouraging wind developments only to not continue production tax credits. Granted ethanol from food is wrong, but advanced biofuels should be more of a focus. Also, wind is certainly leading the renewable push to be more economically viable versus fossil fuels without subsidies, but many investors want more assurances before they start funding new projects or technologies. 

While a true national energy policy has been lost from sea to shining U.S. sea, there is such a stark contrast of energy views between Democrats and Republicans. This is very troubling to me since such strong opposing stances on alternative energy will only hinder progress toward developing cleaner sources of power at home. We need more clarity on the government position. Therefore the 'all of the above' energy concept should be reevaluated so that reducing carbon and being energy independent can coexist for future generations. 

Could OPEC become a thing of the past?
Whether or not you support an 'all of the above' energy policy, there's no denying that record oil and natural gas production is revolutionizing the United States' energy position. Finding the right plays while historic amounts of capital expenditures are flooding the industry will pad your investment nest egg. For this reason, the Motley Fool is offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 


Read/Post Comments (4) | Recommend This Article (1)

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  • Report this Comment On February 02, 2014, at 6:07 PM, True411 wrote:

    This article is completely fallacious in blaming the storm named Sandy on “Climate Change”. North America’s northeastern coast has been hit by hurricanes many, many times before, and Sandy wasn’t even a hurricane when it made landfall.

    In 1635 the “Great Colonial” Hurricane hit New York and New England, the “Dreadful” Hurricane of 1667 destroyed over 10,000 houses in Virginia, and the “Great Storm of 1693” devastated Long Island. There were other hurricanes that made landfall in the Tri-State area in 1788 (left the Battery in ruins), 1821, 1893 (the second hurricane that year, different from the one that hit Halifax, Nova Scotia), 1944 (“Great Atlantic” hurricane), 1954 (Carol), and 1991 (Bob).

    Listen up here, the 1938 "Long Island Express" made landfall in Long Island as a Category 3 hurricane with sustained winds of 125 mph and wind gusts up to 150 mph bringing waves surging to 35 feet; relatively speaking, the Long Island Express makes Sandy look like a breezy day in the park.

    Hurricanes have also pummeled Canada’s Maritime Provinces many times before; in 1775, the “Independence Hurricane” killed at least 4,000 people in Newfoundland and an 1873 hurricane left 223 dead, destroyed 1200 boats, and flattened 900 buildings in Nova Scotia. Other hurricanes hit the Canadian Maritimes in 1866, 1886, 1893 (1st of two hurricanes that hit the Northeastern coast that year), 1959 (Escuminac), 1963 (Ginny), and 2003 (Juan).

    Sandy had nothing whatsoever to do with "climate change"; Sandy was an unfortunate convergence of a tropical storm and a nor’easter at a full-moon high tide. Indeed, if the storm had hit just a few hours later, not at high tide, it would not have had the impact that it did.

  • Report this Comment On February 02, 2014, at 6:21 PM, mtnhiker wrote:

    Why is the motley fool backing a corportist style economic system?

  • Report this Comment On February 02, 2014, at 6:22 PM, mtnhiker wrote:

    The Motley Fool lately seems to be full of signals that back government Take over of Health care and Government take over of Energy, This is totally against free enterprise and seems to support government Favored Industries and Companies. This seems counter to the support of freedom in business

  • Report this Comment On February 02, 2014, at 6:56 PM, floydhowardjr wrote:

    We need to put an emissions tax on any intestinal flatulence based on the decibel level of the escaping gasses! Monitoring stations could be created that would contain high amp microphones that would pinpoint any abrupt animal discharges of methane gas. NSA could oversee the technical operations and Homeland Defense could then arrest the miscreants and round up the animals. Studies have shown that most of the methane flatulence comes from Washington DC! We need to tax the government first until they cannot print anymore money and then every living thing that breaks wind.

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John Licata

John Licata is the Founder & Chief Energy Strategist of Blue Phoenix Inc. You can follow John on Twitter @bluephoenixinc

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