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Tuesday, June 15, 2010

Obama from the Oval Office on the Spill

President Obama just finished a speech that lasted just less than 20 minutes speaking about the spill, its effects, the recovery, and legislation on energy independence.

It's still not really all that clear exactly what the administration will do to stop the spill. He did say that in the next two weeks 90% of the oil will be clogged. That's a number to watch. He also said that his administration has been on top of it from the beginning. If that's the case, that's not much of a positive statement for the administration.

The president said that he will "force" BP to create a fund to pay out to the folks in the gulf. He can't force them legally. He can strong arm them, shame them, or encourage them, but legally, he can't force them. So, it's not clear what he's going to do.

He also singled out the Minerals and Mining Safety Commission as a specific regulatory body that failed. They did and most of us already knew that. President Obama correctly pointed out that the MMS got too cozy with the oil companies they were regulating. They infamously accepted gifts from oil companies prior to the spill. He incorrectly called this a lack of regulation. It wasn't. It was poor enforcement of regulation. So, if the president responds with even more regulation, he'll be solving the wrong problem.

Finally, and in a naked act of political opportunism, he called for energy independence legislation. He never said cap and trade by name. I think everyone would like to be energy independent, but no one knows how to make that happen. He compared energy independence to military building in WWII. That's not much of a comparison. During WWII, we had a command economy. Is that what he's suggesting?

I still believe that the fastest way toward energy independence is breaking up the oil companies. They are an oligopoly and they've decided that gasoline made from oil is their best path to money. They have no use for alternative energy sources. Without them, our cars will always be run mostly on gasoline from oil. There's no call to break them up. Instead, one may go out of business, making the others even more powerful.

More coverage here.


AG said...

It would also help not to appoint regulators who are ideologically opposed to regulating.

Elaine Chao, I'm looking in your direction...

mike volpe said...

I'm not sure what Elaine Chao has to do with this.

This is one of your weaker comments. Maybe, I should stop complimenting you when you make a good comment.