Obama's Energy, Environment Strategies To Be 'Mixed Bag'

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"This crisis has reminded us that without a watchful eye, the market can spin out of control."

As Barack H. Obama was sworn in Jan. 20 as the 44th U.S. president, his administration announced an energy and environment program with provisions directly affecting the oil and gas industry in several areas.

The strategy aims to save more oil than the U.S. imports from Venezuela and the Middle East combined within 10 years by promoting "the responsible domestic production" of oil and gas, according to information posted on the White House website. It also embraces a "use it or lose it" approach to existing leases.

Proposals to reduce U.S. oil imports also include enacting higher fuel economy standards, putting 1 million plug-in hybrid cars on the road by 2015, creating a $7,000 tax credit for purchasing advanced fuel vehicles and establishing a national low-carbon fuel standard.

Under what is called the "Obama-Biden Comprehensive New Energy for America Plan," the White House also includes prioritized construction of a natural gas pipeline from Alaska as part of a program to create 5 million "green" jobs by investing $150 billion over the next 10 years.

The jobs creation portion also proposes clean coal technology development and deployment; greater energy efficiency, including weatherization of 1 million homes annually, and ensuring that 10% of the nation's electricity come from renewable sources by 2012 and 25% by 2025.

In an effort to provide short-term relief to consumers, the plan calls for swapping oil from the Strategic Petroleum Reserve to cut prices and cracking down on excessive energy speculation. Democrats in Congress proposed both actions as oil prices approached $150/bbl and retail gasoline prices broke the $4/gal barrier early last summer.

Obama's inaugural address included references to excessive financial speculation, which several federal lawmakers believe played a greater part in 2008's record-high oil prices than supply and demand. "This crisis has reminded us that without a watchful eye, the market can spin out of control," the president said.

Finally, the incoming administration's energy and environmental strategy calls for implementation of an economy-wide cap-and-trade program to reduce greenhouse gas emissions by 80% by 2050. It also pledges to make the U.S. a global leader in addressing climate change.

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