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Fri October 5, 2012
Candidates Tout Different Routes To 'Energy Security'
Originally published on Fri October 5, 2012 8:07 pm
The pressing energy issue in the 2008 presidential campaign was how to reduce carbon emissions and limit global warming. Four years later, the drive for "green energy" has been replaced by a new imperative: the need to end U.S. dependence on foreign oil.
"I will set a national goal of North American energy independence by 2020," Mitt Romney declared during a campaign speech in August. "That means we produce all the energy we use in North America."
He reiterated that goal in the opening minutes of the presidential candidates' debate in Denver this week.
President Obama is not far behind, though his interest in "energy security" is somewhat muted by concerns over the environmental impact of fossil fuel production. The Obama plan would cut oil imports in half by 2020.
The rationale is obvious. With a secure energy supply of its own, the United States would be less affected by instability in the Middle East and elsewhere. Indeed, every president since Richard Nixon has touted a plan for energy independence.
Dependence On Foreign Oil Declining
The revived emphasis on this goal in the current campaign reflects a sense that U.S. self-sufficiency in energy has become a more realistic goal today than at any point in decades, due to a domestic energy boom.
The heightened tumult in Iran, Iraq, Libya and other countries, meanwhile, has underscored the danger of depending on Middle Eastern oil suppliers.
Romney and Obama, however, have starkly different approaches to the problem of achieving energy self-sufficiency.
Romney would boost production by extending a helping hand to energy companies, promising a relaxation of environmental restrictions on exploration and production, a green light on infrastructure projects such as the Keystone pipeline, and more permits to drill for oil and gas on federal lands.
For energy advice, Romney turns to oil executives like Harold Hamm, chairman of Continental Resources.
In testimony before the House Energy and Commerce Committee last month, Hamm said oil companies are facing an "onslaught" of new environmental regulations that raise production costs without producing "a commensurate level of environmental benefit."
He noted that his own company tries "as much as possible to avoid [drilling on] federal land," concentrating on private property instead. He cited the Obama administration's "policies and restrictions," saying Continental had waited as long as "two to three years" to get permission to drill on federal land, whether onshore or offshore.
Domestic Production Rising
In fact, petroleum production in the United States during President Obama's first three years in office jumped by 24 percent, while oil imports declined by a similar amount.
In the first eight months of 2012, imports accounted for just 42 percent of the total oil consumed in the United States, the lowest figure in more than 20 years.
The Romney team, however, says the jump in U.S. energy production occurred almost entirely on private land and had little or nothing to do with the Obama administration's energy policies.
Independent analysts generally agree, saying the energy bonanza has largely been due to new technology and techniques like hydraulic fracturing and horizontal drilling, with high oil prices providing a further incentive to expand production.
On the other hand, Romney argues, new federal policies could spur even more oil production, on private as well as government land, because energy companies are more likely to invest in new U.S. ventures when they see a U.S. president signaling he will accommodate energy production.
That view makes sense, says Daniel Ahn, chief commodities economist at Citigroup.
"I would posit that if whoever is in the White House next year leans toward a more supply-friendly scenario," says Ahn, "there will be great [investor] interest, and likely the markets will respond."
For his part, Obama has welcomed the new domestic energy production and promises to support it during a second term.
"I want us to control our own energy destiny," he declared during a speech last March in Cushing, Okla. "So, yes, we're going to keep on drilling. Yes, we're going to keep on emphasizing production."
A Different Emphasis
The Obama plan, however, focuses relatively less on increasing the supply of domestic oil and more on reducing domestic demand. In that Oklahoma speech, the president argued that more drilling alone would not necessarily make the United States more energy secure.
"Even if we drilled every little bit of this great country of ours," he said, "we'd still have to buy the rest of our needs from someplace else if we keep on using the same amount of energy, the same amount of oil."
Energy analysts like Ahn says Obama makes a good argument. The progress in moving toward energy self-sufficiency, Ahn points out, has not come just from the boost in oil production.
"A less heralded but potentially even more important factor has been [a] decline in U.S. oil consumption," Ahn says. "That's also helping achieve, quote-unquote, energy independence."
One factor explaining this decline in oil consumption is that our cars are now more fuel efficient — thanks in large part to fuel efficiency standards backed by the Obama administration.
Romney wants to relax those standards. The Obama plan would also reduce the demand for oil by boosting energy alternatives like wind, solar and natural gas.
Behind the differences of emphasis in their energy plans lie other noteworthy policy differences. Romney would eliminate tax credits and other subsidies for the wind and solar industries. Obama would continue them.
The Obama plan, on the other hand, calls for eliminating tax breaks for the oil industry. The Romney plan would keep those.
Greater energy security is the goal in both the Obama and Romney plans, though by different routes, at different speeds, and with different collateral consequences.
MELISSA BLOCK, HOST:
Every president since Richard Nixon has had a plan to end the country's dependence on foreign oil. With a secure energy supply of its own, the U.S. would be less affected by instability in the Middle East and elsewhere. It's an issue again in this year's campaign. In the series we call Solve This, we're looking at some of the challenges facing the nation, problems the next president will have to confront. NPR's Tom Gjelten reports on the Obama and Romney plans to boost America's energy security.
TOM GJELTEN, BYLINE: The problem here is not in dispute. The United States depends too much on other countries for its energy supply. The new buzz word? Energy independence. Here's Mitt Romney.
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GOVERNOR MITT ROMNEY: I will set a national goal of America and North America - North American energy independence by 2020. North American energy independence by 2020. That means we produce all the energy we use in North America.
GJELTEN: That from a speech in August. At the debate this week, achieving energy independence was number one on Governor Romney's to-do list. Actually this is now a realistic goal thanks to a recent jump in oil and gas production in the United States. President Obama says he, too, will push to further America's energy security, though without abandoning other goals like protecting the environment. But first, the Romney plan. He'd boost energy production even more, mainly by giving a hand to energy companies. Fewer environmental restrictions. A green light on pipeline projects, like Keystone, coming down from Canada. Plus more permits to drill for oil or gas on federal land. Romney's top energy advisor is oil executive Harold Hamm. At a house hearing last month, Hamm said his company, Continental, looks for oil these days mainly on private property, not federal.
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HAROLD HAMM: Well, actually, it's been Continental's policy as much as possible to avoid federal land. You know, we're a growth company and we...
REPRESENTATIVE STEVE SCALISE: Due to the policies of the administration?
HAMM: Due to the policies and restrictions on federal lands. I mean we've seen permits take as much as two to three years.
GJELTEN: Hamm was prompted there was Louisiana Republican, Steve Scalise. The Romney team says the jump in U.S. energy production under President Obama has come almost entirely on private land, and has nothing to do with the administration's policies. Independent analysts say that is largely true. It's new technology and techniques, like hydraulic fracturing and horizontal drilling, that have made the energy bonanza possible. That doesn't mean government policy is irrelevant. Daniel Ahn of CitiGroup says that when a president signals that he'll accommodate more energy production, companies are more likely to invest in new ventures.
DANIEL AHN: I would posit that if, whoever is in the White House next year, leans toward a more supply friendly scenario, there'll be, of course, great interest and likely the markets will respond.
GJELTEN: The Obama administration welcomes all the new production, but its energy security plan takes another approach. Rather than focus entirely on producing more oil to meet the demand, President Obama would also reduce the demand to meet available supply. At a speech last March in Oklahoma, the president said more drilling alone won't make the U.S. energy secure.
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PRESIDENT BARACK OBAMA: Even if we drilled every little bit of this great country of ours, we'd still have to buy the rest of our needs from someplace else if we keep on using the same amount of energy. The same amount of oil.
GJELTEN: In fact, we're using less. And here energy analysts like Daniel Ahn of CitiGroup say Mr. Obama has a point. The progress in moving to energy self-sufficiency, Ahn says, has not come just from the boost in oil production.
AHN: A less heralded, but potentially even more important factor has been this decline in oil consumption in the U.S. That's also helping achieve quote "energy independence."
GJELTEN: One factor explaining this decline in oil consumption, is that our cars are now more fuel efficient. Thanks in part to fuel efficiency standards backed by the Obama administration. Governor Romney wants to relax those standards. The Obama plan would also reduce the demand for oil by boosting energy alternatives, like wind and solar. Some stark differences of emphasis, and behind those differences lay others, different tax and spending ideas, for example. Governor Romney would eliminate credits and other subsidies for the wind and solar industries. President Obama would continue them. The Obama plan, on the other hand, calls for eliminating tax breaks for the oil industry. Those the Romney would keep. So solving the problem of our dependence on foreign oil, but by very different routes. Tom Gjelten, NPR News, Washington.
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BLOCK: This is NPR. Transcript provided by NPR, Copyright NPR.