Obama's anti-oil team; The president-elect is poised to hand environmental policy to people who want to punish petroleum

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Appeared in the Financial Post

The environmental lobby is positively rapturous over Barack Obama's new Green Dream Team, appointed to stomp out our carbon footprint. In sharp contrast to the president-elect's relatively moderate -- if not downright stale -- picks for other cabinet posts, the green teamers are widely regarded as unwavering in their devotion to more stringent regulations and steeper taxes. To the extent they accomplish their goals, Canada will suffer as America's foremost petroleum supplier and leading trading partner.

Mr. Obama is calling for cutting so-called greenhouse-gas emissions by a whopping 80% by 2050, principally through a cap-and-trade regulatory scheme. He also vows to create five million clean jobs to counteract the crippling fuel costs that would result from a carbon crackdown.

As the president-elect told the San Francisco Examiner: Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket.

Ottawa and the provinces have likewise joined the climate-change crusade. But Canadians should hope that the Obama administration does not come anywhere close to its regulatory targets, given that zero-emission substitutes are in short supply. The North American economy would barely function under such conditions, as the only way to achieve these targets would be to drastically reduce economic output.

With doubts about climate change theory deepening, Mr. Obama's commitment to a fossil fuel-free future is ill-considered, at best. But he's nothing if not politically astute. With an eye on mid-term congressional elections in less than two years, the president-elect apparently has decided that he cannot turn over the beleaguered economy and war on two fronts to the left wing of the Democratic Party. Consequently, he is hoping instead to satisfy the true believers of his base with a full-blown green crusade.

The Green Team represents a dramatic departure from decades of U. S. energy policy. Republicans and Democrats alike have long recognized the necessity of affordable energy to economic growth. U. S. energy policy has therefore focused on securing reliable and secure supplies of fossil fuels.

In contrast, Mr. Obama is placing the nation's energy and environmental policy in the hands of three career bureaucrats and one biofuels researcher, all of whom are committed to punishing the petroleum industry. Leading the charge will be Carol Browner, who served as EPA administrator under former president Bill Clinton. An acolyte of Al Gore, Ms. Browner tried to circumvent Congress in regulating carbon dioxide as a pollutant under the Clean Air Act. She has been appointed as energy czar to coordinate federal action on global warming policy.

Tapped to head the Energy Department is Steven Chu, formerly the director of the Lawrence Berkeley National Laboratory. Despite stellar academic credentials, Mr. Chu appears to be astonishingly ill-informed about climatology, claiming that global warming now threatens the planet with sudden, unpredictable and irreversible disaster. He lacks expertise in the Dept. of Energy's primary functions, i. e., managing America's stockpile of nuclear weapons and nuclear waste disposal. However, he is an enthusiastic advocate of dramatic increases in gasoline taxes and he freely admonishes the nation to immediately start decreasing the amount of energy we use.

Named to head the EPA is Lisa P. Jackson, former commissioner of the New Jersey Department of Environmental Protection and an underling of Ms. Browner at the U. S. EPA. The team also will include Nancy Sutley as chair of the Council on Environmental Quality. She, too, served under Ms. Browner at the EPA before becoming deputy mayor for energy and environment for the City of Los Angeles.

There certainly is a degree of hyperbole in Mr. Obama's energy and environmental pronouncements. In reality, no American president could simply halt the huge flow of oil by decree.

However, his entire energy platform need not be enacted to raise significantly the costs of supplying oil to the U. S. market. For example, Mr. Obama is proposing imposition of a low-carbon fuel standard, which would require gasoline suppliers to reduce the volume of emissions associated with the lifecycle production of transportation fuels.

Such a standard would constitute a significant market barrier to Canadian petroleum derived from oil sands, which requires more energy (and thus creates more emissions) to produce and refine than crude oil and products from conventional sources. About half of the Canadian oil exported to the United States originates from oil sands.

Indeed, Mr. Obama has previously made plain his antipathy toward Canadian oil; during the campaign, policy adviser Jason Grumet questioned whether the Obama administration would allow imports of petroleum derived from oil sands.

If the only way to produce those resources would be at a significant penalty to climate change, then we don't believe that those resources are ... going to play a growing role in the long-term future, the spokesman said.

Apparently, the president-elect has failed to grasp the simple fact that limiting imports of Canadian petroleum would undermine North American security. Moreover, as Alberta Premier Ed Stelmach has noted, it's undoubtedly a whole lot cleaner to pipe oil across the shared U. S.-Canadian border than to ship it from the Middle East countries that so detest all things North American.

The slew of energy subsidies and mandates proposed by the president-elect also bode ill for Canada, which relies on a vibrant American market for its own economic growth. For example, Obama is calling for a tightening of fuel economy standards by 4% annually, which would impose tremendous costs on the automotive sector.

As the single largest supplier of foreign oil to the United States, Canada obviously has a stake in the energy and environmental politics across the border. Neither country will benefit by limiting energy sources and punishing those who produce them.

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