(Updates with Natural Resources Defense Council comments starting in 14th paragraph.)
Jan. 25 (Bloomberg) -- President Barack Obama pushed drilling for gas in shale rock and support for cleaner energy sources to boost the economy in his final State of the Union address before facing U.S. voters in November.
Hydraulic fracturing, the process of injecting water, sand and chemicals underground to free gas trapped in rock, could create more than 600,000 jobs by the end of the decade, Obama said yesterday. The process, called fracking, is among a list of energy policies Obama said would fuel economic growth.
“We have a supply of natural gas that can last America nearly 100 years, and my administration will take every possible action to safely develop this energy,” Obama said.
Obama reiterated support for conservation and cleaner sources of power and pledged more oil drilling as part of an ‘all-out, all-of-the-above’’ policy “that’s cleaner, cheaper, and full of new jobs.” He said domestic energy production is at an eight-year high and imports of foreign oil were declining, prompting criticism from Republicans.
“It’s just a blind accident, if in fact we are producing more oil or natural gas than in previous years, because it’s not because of any of his efforts,” Representative Darrell Issa, a California Republican and head of the House Oversight and Government Reform Committee, said after the speech.
Republicans also sought to contrast Obama’s pledge to use energy policy to create jobs with his denial of a permit to TransCanada Corp.’s Keystone XL pipeline to connect Canada’s oil sands to refineries on the Gulf coast.
Indiana Governor Mitch Daniels, delivering the Republican response to a nationwide television audience, called Keystone a “perfectly safe pipeline that would employ tens of thousands” and said that Obama has sought to stifle energy production in the U.S.
Keystone would “have done more than any other project to increase our energy security and revive our economy,” Senator James Inhofe, an Oklahoma Republican, said in a statement after the speech.
Obama announced incentives to make industries more energy efficient, and again urged Congress to require that a larger percentage of the nation’s power come from low-pollution sources.
He directed his administration to open up more than 75 percent of potential offshore oil and gas resources for production.
“Right now, American oil production is the highest that it’s been in eight years,” Obama said. “Not only that - last year, we relied less on foreign oil than in any of the past 16 years.”
U.S. natural-gas production averaged 1.89 trillion cubic feet a month through October, 13 percent higher than the average during President George W. Bush’s two terms, according to Energy Department data. Crude oil production is 2 percent higher, the department said.
While the U.S. has abundant natural-gas resources, it lacks regulations that would ensure safe production, Frances Beinecke, president of the New York-based Natural Resources Defense Council, told reporters in Washington today. She said the group “will be as aggressive as it can be” to close that gap.
Obama said the drive for new drilling would be accompanied by regulations to ensure safe drilling practices. Those would include a requirement that companies operating on public lands disclose the chemicals used in the fracking fluid.
‘Tip of Iceberg’
“That’s very, very important, but that’s only the tip of the iceberg,” Beinecke said. “There are huge air quality impacts. These huge industrial operations are coming to small towns.”
As Obama backed more domestic oil and gas production, he also pledged support for renewable sources of power, urging Congress to pass clean energy tax credits and a mandate for more electricity to come for cleaner sources of power.
An energy efficiency initiative he’s backing would cut $100 billion from the nation’s energy bills, he said. Obama also pledged that the Defense Department would make the largest renewable energy purchases in history.
Senator Jeff Bingaman, a New Mexico Democrat and chairman of the Energy and Natural Resources Committee, said in a statement that the priorities Obama laid out were a “very good blueprint for how we can accelerate economic growth in our country.”
Dave Foster, executive director of the BlueGreen Alliance, a group that represents labor and environmental groups, said in an interview that Obama was “showing us a path” to how clean energy can increase manufacturing jobs.
Obama also repeated his call from last year to repeal tax credits for the oil and gas industry. That effort failed to win broad support in Congress, after producers said the measures would push more production and jobs outside the U.S.
“Advocating greater energy production but penalizing those who provide that energy is not a sound energy policy, but a contradiction,” Jack Gerard, chief executive officer of the American Petroleum Institute, said in a statement.
--Editors: Steve Geimann, Jon Morgan
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