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Obama defends energy policy, drills Republicans

Olivier Knox
The Ticket

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(Nati Harnik/AP)

On the defensive over painfully high and politically dangerous gas prices, President Barack Obama boasted Thursday that drilling, baby, drilling was a key part of his overall energy strategy and announced a largely symbolic step to speed construction of a section of the controversial Keystone XL pipeline.

"If you guys are talking to your friends, your neighbors, your co-workers, your aunts or your uncles and they're wondering what's going on in terms of oil production, you just tell 'em anybody who suggests that somehow we're suppressing domestic oil production isn't paying attention," Obama said in a televised, campaign-style speech.

And the president mocked unnamed critics he described as pushing more domestic drilling as a cure-all for the country's energy woes and its heavy reliance on oil imports.

"If I put an oil rig on the South Lawn [of the White House], if we had one right next to Washington Monument, even if we drilled every little bit of this great country of ours, we'd still have to buy the rest of our needs from someplace else," Obama said, standing in front of vast tubes destined to become parts of a pipeline.

The president also worked to deflect criticism over his administration's decision in November to delay approval of the Keystone XL pipeline, designed to carry oil from Canada to U.S. refineries on the Gulf Coast. Polls show Americans favor the project, and Republicans have coupled that delay to high gas prices to brand Obama's energy policies a failure.

Obama, who had applauded when the pipeline's parent company, TransCanada, announced plans earlier this year to build the southern leg of Keystone, said he would now step in and help.

"Today I'm directing my administration to cut through the red tape, break through the bureaucratic hurdles and make this project a priority, to go ahead and get this done," he said in Cushing, Okla., on Thursday.

But he stood by his administration's decision to withhold a permit to build the northern leg and accused Republicans of trying to short-circuit a study of the project's potential environmental impact because they thought "this might be a fun political issue" to make it "impossible for us to make an informed decision."

"The southern leg of it we're making a priority and we're going to go ahead and get that done. The northern portion of it we're going to have to review properly to make sure that the health and safety of the American people are protected. That's common sense," he said.

But even before the announcement, there were reports that Obama's decision would have little impact, if any, on the time frame for the new pipeline, which requires little help from Washington.

"Gas prices are rising, and Americans are frustrated with the gap between the president's words and his actions," Republican House Speaker John Boehner said at a press conference Thursday. "Today, he's out in Oklahoma trying to take credit for a part of the pipeline that doesn't even require his approval."

And some environmentalists moved quickly to condemn the president's new emphasis on drilling.

"President Obama has taken a dangerous wrong turn on energy," National Wildlife Federation President and CEO Larry Schweiger said. "Oil companies are drilling like never before, and spilling like never before, yet we are paying at the pump like never before.  Rushing pipelines and drill rigs for rich oil executives will only delay the investments we need in renewable energy and create long-lasting damage to our waters and lands."

Obama's comments came with Americans nationwide facing nearly $4-per-gallon prices that have burned up some of the optimism about signs the economy is recovering.

But presidents can do little about high gas prices in the short term, and independent analysts—as well as the White House—blame pain at the pump on global factors like soaring demand in booming economies like China, India and Brazil, unrest in oil-producing countries like Sudan and Yemen, and most of all the possibility of disruptions stemming from the tense standoff with Iran over its nuclear program.

"The biggest factor right now is the uncertainty with Iran," Aaron Brady, a director of research at Cambridge Energy Research Associates, explained to Yahoo News. "They're an important source of world supply, the sanctions aim to cut into that supply, and there's the possibility of this spilling into a military conflict."

"The markets hate the uncertainty. Do the markets want to be on world prices going down when we could be heading to a conflict with Iran? Probably not," he said.

Building Keystone "probably wouldn't have any net impact on oil prices immediately," Brady said. But building it, and other pipelines designed to ease the glut of supply in the heartland of North America, could ultimately help lower costs by boosting supply, even though "there's just so many other factors out there that shape the world price for oil that it's not easy to predict the net effect.

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Another benefit could be to provide "access to reliable North American barrels" that would dampen the impact from an oil supply shock overseas.

"But it's hard to argue that we're going to become truly independent in that we're going to have $2 gasoline and the rest of the world will have $6 gasoline. That's not going to happen," Brady said.

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