Credit: Whitehouse.gov, Pete Souza

President Obama seems to have a newfound love of oil.

In his State of the Union Address last night, he emphasized the development of domestic energy supplies, particularly oil and natural gas, but also solar and wind power. 

Although he called on Congress to pass legislation creating a clean energy standard, as he did last year, it was clear that he's focusing on supporting clean energy by doing things within his administration that don't require Congressional support.  

Last year Obama mentioned the word "oil" twice, the first time to call for the United States to end its dependence on it, and the second time to call for funding clean energy development by decreasing tax breaks for oil companies.

This year he mentioned oil nine times (10 if you include a reference to a regulation that categorized cow milk as an oil). Gone was any sense that oil was an addiction, as his predecessor George Bush had called it, or something the United States had to reduce its dependence on. He praised the fact that the U.S. produced more oil last year than it had for eight years, and he said that he is opening more areas for offshore drilling. When he called for the development of alternatives to oil, his reason was that we just don't have enough of it in the United States. 

Although Obama sounded supportive of oil, he did call for an end to subsidies for oil companies and for Congress to "double down" incentives for clean energy. He also said he would continue efforts to make sure oil companies can contain oil spills like the one in the Gulf of Mexico. 

Last year, Obama said that U.S. oil dependency could be broken by turning to biofuels and electric vehicles. He didn't mention either this year. This is in spite of the fact that progress has been made on both fronts. 

Last year was the first full year of sales for new electric cars from GM and Nissan, and several more automakers will start selling electric vehicles this year. The first commercial cellulosic ethanol plants could also start operation this year. Sales of electric vehicles, however, have been slower than expected. And, by now, cellulosic ethanol plants were supposed to have been making hundreds of millions of gallons of ethanol, according to a federal mandate.

While Obama didn't mention electric vehicles, he did talk about high-tech batteries, saying that the U.S. is "positioned" to become the leading manufacturer of these batteries. Presumably, he's referring to electric car batteries and the large factories for making them that the government has subsized. The U.S. certainly is building a lot of battery factories. But it will be difficult for a new U.S. battery industry to compete with the established battery industry in Asia, and in any case, the success of the new factories will largely depend upon sales of electric vehicles increasing dramatically.

If Obama's biggest emphasis last year was on biofuels and electric cars, this year it was on natural gas. He praised domestic natural gas as a resource that is both clean and cheap, and he said that exploiting it could employ 600,000 jobs by 2020. He didn't say how many of those would be new jobs.

Although Obama praised natural gas, he didn't mention any specific support for the industry. Indeed, his only pledge was that he would regulate it, requiring companies to disclose the chemicals they use in the fracking process for extracting natural gas from shale.

Some support for natural gas could come from the clean energy standard—in lieu of a cap and trade system for reducing carbon dioxide emissions—that Obama asked Congress to pass last year, and again this year. The standards would have supported natural gas over coal, since burning it emits about half the carbon dioxide emissions as coal. 

Although Obama mentioned the clean energy standard, that's not really where he focused his attention last year. Instead, he's been working to push forward clean energy by means that don't require Congressional approval, such as new EPA limits on power plant pollution and tougher fuel economy standards. He spoke of working without the support of Congress in his speech, declaring that his administration would allow more construction of clean energy on federal lands, and that the U.S. Department of Defense would increase its use of clean energy sources. Expect Obama to continue this strategy, especially in an election year, when Congress is expected to get even less done.

This week ExxonMobil announced a major oil find: an estimated 700 million barrels of oil in the Gulf of Mexico. It made the announcement after a drilling ban in the Gulf was lifted. The discovery provided an occasion for renewed calls to change government policies to promote drilling of domestic oil.

From Reuters:

(The discovery) speaks to the fact there are resources in the Gulf and if we have a tax and regulatory environment that will encourage us to find and produce our own domestic oil, the industry will respond," said Mark Routt, an energy industry consultant with KBC Advanced Technologies.

According to Bloomberg, that's "the biggest discovery in the region in 12 years."

The Chairman of the House Natural Resources Committed, Doc Hastings (R-Washington) said the find showed the importance of increased drilling offshore:

Today's oil and natural gas discovery in the Gulf of Mexico is a significant step forward for American job creation and energy production. This is the exact reason why Republicans have been pressuring the Department of the Interior to issue offshore permits—America has abundant oil and natural gas reserves, we simply need to allow the hardworking men and women in the energy industry to do their job.

The Wall Street Journal celebrated:

Exxon Mobil Corp.'s huge new oil discovery in the Gulf of Mexico is good news for domestic energy production, but it's even better news as a sign that last year's panic over the BP spill won't continue to cripple American offshore oil exploration.

The Times-Picayune opined:

[The discovery] shows why the Obama administration needs to ramp up the approval of safe drilling permits.

But not all were pleased.One blogger started out jubilant . . .

Yay! Energy problems solved! We can tell those OPEC thieves to go KISS OUR GRITS!

Then ended on a more sober note after noticing that the find amounts to only a month's supply of oil (37 days based on 2010 Energy Information Administration figures).

Anyone got a horse (with buggy) we can buy? Cheap.

Here's a little more perspective, again from Reuters:

Irving, Texas-based Exxon had reserves of 24.8 billion barrels oil equivalent at the end of last year.

In other words, the huge find boosted Exxon's reserves by only 3 percent.

Climate activist Joe Romm wrote:

The discovery doesn't prove we have 'abundant' oil reserves, as Hastings claims. It proves the exact opposite, that 'Drill, Baby, Drill' can't solve our problems.

Almost all of the world's growth in energy demand is happening in Asia, propelled by the economic growth in places such as India and China. Since 1990, for example, China's energy consumption has tripled.

In places such as Shanghai, it looks like this energy growth is the result of conspicuous consumption: towering sky scrapers blaze with light an night; streets are lined, Times-Square style, with massive LED billboards; vast networks of highways are packed with cars idling in traffic jams.

But in much of Asia the energy is providing basic needs: lights, heat, health care, clean water--curtailing the growth in energy consumption, or switching to more expensive renewable sources of energy, will mean denying people these basic services, which is why Asian governments are working so hard to secure energy supplies, buying up oil fields around the world and constructing vast pipelines and elaborate liquefied natural gas (LNG) terminals.

These efforts are exacerbating long-standing tensions in Asia as countries compete for limited resources, says Mikkal Herberg, a senior lecturer in international relations and Pacific studies at the University of California at San Diego. But it doesn't have to be that way. Oil, to take one of the most important energy sources, is a commodity that can readily be traded and shipped all over the world. It doesn't matter which oil field which country draws its oil from--just like it doesn't maker where in a lake people are pulling out their drinking water. With the lake, what matters most is how much water there is in the whole lake. Likewise, the cost and availability of oil depends on the state of worldwide markets. The best way to make sure those markets are as healthy as possible--avoiding spikes in prices and ensuring that enough oil is found and produced--is to make do what members of the International Energy Agency have been doing, Herberg says. They have all stockpiled oil supplies, which they can use together to ride through supply disruptions, decreasing prices spikes and drops. Right now, for a number of reasons, China and India aren't part of the IEA--he says that needs to change.

The other major thing that would help is opening up the worlds known oil fields to the management of international oil companies, which typically have better technology for managing oil fields, ensuring that oil fields are managed properly, Herberg says. If they aren't, oil can be stranded underground. This is something that can only be achieved, he says, if countries in Asia, and elsewhere, exert concerted pressure on countries that have nationalized their oil fields and mismanaged them. As long as they work against each other, competing to carve up the world's oil resources, these oil-producing countries will have the advantage.