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Last week I saw some big (and possibly surprising) news from President Obama: plans to open the Atlantic coastline, the Eastern Gulf of Mexico, and Northern Alaska to oil and natural gas drilling.

“The answer is not drilling everywhere all the time,” Obama said.  “But the answer is not, also, for us to ignore the fact that we are going to need vital energy sources to maintain our economic growth and our security.”

The move appears to be an attempt to placate Republicans, who have historically pushed for an increase in American oil exploration and drilling (drill, baby, drill anyone?).  However, it is unclear whether this goodwill gesture will be enough to satisfy Conservatives.

Not surprisingly, the expansion plan has angered many who are concerned about the effects of drilling on the environment.  Obama tried to address this in his speech.

Bird

Let's hope offshore drilling doesn't result in more of these poor critters...

“There will be those who strongly disagree with this decision,” Obama said, “including those who say we should not open any new areas to drilling. But what I want to emphasize is that this announcement is part of a broader strategy that will move us from an economy that runs on fossil fuels and foreign oil to one that relies more on homegrown fuels and clean energy.”

The guy has a point.  Like I talked about a few weeks ago, Americans are less concerned about the environment than ever in the presence of high unemployment rates and an unstable economy.  And this theory behind the decision makes sense: the less money we use to import oil, the more money we have for other things, like investing in renewable energy or creating green jobs.  However, it doesn’t seem very likely that offshore drilling will affect oil prices anytime soon.

It’s been rough going against climate skeptics and legislators who seem determined to fight anything with Obama’s stamp on it.  This action might make the road ahead a little easier.

To soften the blow, President Obama also announced strict fuel economy regulations that will take effect in coming years.  By 2016, the average miles per gallon achieved by carmaker’s fleets must be 34.1, although some expect that to increase to 35.  This means that small trucks will likely average about 29 mpg while cars will get about 38 mpg.  The new regulations will cost new car buyers an average of $926 in six years, although they can expect to save over $3,000 in gas money during their vehicle’s lives.

President Obama appears to be trying to please everyone.  Maybe we can get some measure of his success during the upcoming climate talks in the Senate.

Drilling for oil

Our future or our past?

I would love to know everything about oil subsidies in America.  Maybe not because I think they’re the most exciting thing in the world (although they account for billions and billions of dollars), but because I like to know things.  As such, some people call me the KGB.  I am indeed not Russian, but I am curious.  Although I am learning that it’s much more productive to satiate my curiosity with journalistic findings rather than interrogating my loved ones – what can I say, I’m a slow learning.  So today, we’re delving into: the oil subsidy!

First things first: what is a government subsidy?  Simply put, a subsidy is a stipend or some financial assistance the government gives to an industry to prevent its decline.  There are many different kinds to accomplish different things, but that’s the general idea.

Keeping that in mind, it doesn’t necessarily make sense that oil companies (or Big Oil, as some call them) receive billions of dollars every year in government subsidies.  Especially when you take into consideration that Exxon Mobil set the record for highest profits earned by a US company EVER in 2008 to the tune of a cool $45.2 billion.

Exxon Mobil logo

No more government help?

Granted, Exxon and others have seen decreased earnings in the past year due to fewer Americans on the roadways, but overall, they seem to be sitting pretty.

But they might not be able to rely on their government help for very long.

President Obama recently announced his 2011 budget and it’s not business as usual for Big Oil (unless you’re Michael Scott from The Office, and then you have absolutely no idea what that means anyways, so your opinion probably doesn’t matter anyways).  He cut out a bunch of subsidies for fossil fuels (hopefully putting about $36 billion in America’s piggy bank in the next few years) and put in around $6 billion in green energy development.

Here is a good overview of these budget plans from solveclimate.com.  This article brings up a good point – will these proposals make it through the legislative branch?  Similar moves have been shot down by Congress and there hasn’t been a lot of compromising there lately.  Conservatives have already started launching commercial attacks against Democrats in preparation for election year.  Will both parties reach across the aisle and agree to work for the people they represent when looking at the budget?

Time will tell.

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