Obama’s campaign speeches always seem to include a line about how he can take credit for increasing domestic oil and gas production. As the official White House website has it, “domestic oil and gas production has increased every year President Obama has been in office.”
On Wednesday, however, his administration put into effect yet another new regulation making it harder for America’s oil and gas companies to increase production. In fact, that regulation, as the head of the American Petroleum Institute recently wrote, would make American companies unable to compete with foreign competitors. That may be exactly why the president supported it.
The new regulation, Section 1504 of the Dodd-Frank bill, would require American companies to release information detailing expenditures on foreign operations. That proprietary information would immediately be available to foreign and domestic competitors alike, and would be used to undercut whatever advantages American companies have achieved as a result of their own hard work. Section 1504’s “extractives transparency rules,” as interpreted by Obama’s activists at the SEC, force American companies to compete with one hand tied behind their back. Competitors in Moscow and Beijing must be dancing for joy now that the rules have been finalized. Obama has just handed them the keys to the world’s oil riches.
The problems with Section 1504 go beyond the “competitive disadvantage” to which it puts American energy companies. When implemented, Section 1504 will also place American companies in conflict with foreign countries which prohibit the very same disclosures that 1504 mandates.