Reviewing Romney’s Hydrocarbon Plan

Mitt Romney has been accused of being very cagey about what he would specifically do as president other than on his busy first day in the Oval Office repealing laws created during Obama’s years. But in New Mexico he delivered a major campaign speech that left no doubt of what he will do about energy.

"Three million jobs come back to this country by taking advantage of something we have right underneath our feet. That's oil, and gas, and coal,” he said, announcing a plan that is entirely about hydrocarbons with barely a mention of or support for alternative forms of energy .

Both in the talk and in a white paper titled “The Romney Plan for a Stronger Middle Class: Energy Independence” found here, he said he will deliver North American energy independence by 2020 and that lower energy costs brought about by his all-out campaign of exploration, drilling and extraction would return manufacturing jobs to the United States.

His multi-faceted plan would hand over to the states the permitting and oversight of “development and production of all forms of energy on federal lands within their borders”; set up 5-year plans for drilling off the Virginia and Carolina coasts and force their meeting “minimum production targets”; expedite drilling in the Gulf; forge partnerships with Mexico and Canada to “share best practices and technology” and fast-track pipelines between the countries; and re-assess the reserves of the northern half of the hemisphere, which he believes are understated.

There is no question that the last few years have brought about a stunning realization of energy abundance in the U.S. Directional drilling techniques, fracking technology that is making the U.S. the Saudi Arabia of natural gas and has unlocked the Bakken shale in North Dakota — all have enormously increased the nation’s energy reserves. Mr. Romney attributes too much credit to his plan achieving energy independence, though, as we are on course for North American energy independence anyway. And North American independence means we will still be importing oil; it will continue to come from Mexico and Canada. The Energy Information Administration (EIA) projects that imports will be down to 38% by 2020. A 3rd of that will still come from outside North America.

President Obama’s auto efficiency standards are a big contributor to how we get there. The EIA forecasts that his CAFE standards will reduce daily oil consumption by 2.2 million barrels by 2025. But Romney said last December that he would overturn the CAFE rules.

The intention to turn management of federal lands over to the states jumped to the top of most news accounts of the New Mexico speech. Federal lands belong to the country, no matter what state. They belong to us. Yet Romney believes they are his to give away; his attempt would undoubtedly face law suits. The federal government controls oil, gas, coal and mineral permits on federal lands. It at least balances a conservation mandate, as when at the beginning of the year it banned for 20 years the issuance of any additional uranium mining permits in lands near the Grand Canyon.

States are in difficult straits, badly in need of revenue. It is not outlandish to imagine them going overboard issuing permits to industry — and with a Romney administration cheering them on. That’s apparent from the latitude of the language in the white paper which assures us that “Federal agencies will certify state processes” but those processes need only be “adequate, according to established criteria that are sufficiently broad, to afford the states maximum flexibility”.

There is similar language in Romney’s pledge to “Guarantee that state-of-the-art processes and safeguards for offshore drilling are implemented” but that would be done “in a manner designed to support rather than block exploration and production”. The fact is that we have no way to assure that state-of-the-art processes and safeguards work, because we have no way of knowing what went wrong with the blowout preventer in the BP oil “spill”.

Both speech and manifesto dwell entirely on expanding production of hydrocarbons. There is no stated concern for the problems of greenhouse gas emissions or the climate. There is slight mention of alternative forms of energy such as solar and wind, other than to lump them together with oil, gas and coal in treating topics such as rolling back regulations, and in citations to sources elsewhere that question their feasibility.

That’s in keeping with Romney and Ryan intending to shut down the green energy program of grants and government guaranteed loans — a George W. Bush initiative — to ensure that the “playing fie…remains level” with the same policies applying to wind, solar and hydropower as apply to oil, gas and coal development. They will have to stand or fall on their own. Romney has already called for ending deductions for electric cars and green home improvements.

Instead, the Romney plan prefers “basic research” to demonstration projects, which he would evidently shut down, considering them more likely to “yield benefits in excess of costs”. Demonstration projects are essential to finding whether research works in practice and can be scaled. Saying only basic research is needed returns us to George W. Bush’s eight-year stall to avoid action against the threat of global warming:  more research was always needed.

Unable to compete on price without developmental subsidies, with all the support going to hydrocarbon industries (Romney has pledged to continue the $40 billion in subsidies the oil companies receive from Uncle Sam), we can expect alternative forms of energy to be snuffed out.

Except for the ethanol mandate, the worst of the alternatives, which Romney supports so as to draw votes from the farm belt.

Romney accuses Obama of sending “billions of taxpayer dollars to green energy projects run by political cronies”. Before dismissing that as baseless slander, one must consider the book “Throw Them All Out”, by the Hoover Institution’s Peter Schweizer (it was the source of the “60 Minutes” report on congressional insider trading, which we covered, and which led to a restrictive law”). Obama has said that funding of green energy companies was “based solely on their merits”, but Schweizer says 71% of the Obama Energy Department’s green subsidies went to “individuals who were bundlers, members of Obama’s National Finance Committee, or large donors to the Democratic Party”. They raised $457,834 for Obama’s campaign and were rewarded with grants or loans of almost $11.35 billion, says Schweizer.

To its credit, the document if filled with external sources in support of its claims, presenting a burden to the Obama administration to come up with counter-arguments. As an example, fair enough to single out because the main text refers to it, Romney tells us that the Obama administration is “actually being held in contempt of federal court for illegally imposing a moratorium on drilling in the Gulf of Mexico”. Not mentioned is that this was a ruling by a New Orleans judge in February 2011 who recklessly decided that drilling should continue after the worst oil spill in U.S. history while also deciding that expanded safety rules for offshore drilling imposed by the Interior Department violated federal law.

Romney would greenlight the Keystone XL pipeline that would bring oil from Canada to Texas refineries. He expresses no concern for the environmental damage that the viscous, strip-mined tar sands cause, both in heightened emissions during extraction, which uses natural gas to separate the bitumen from the sand, and the 10% to 30% greater emissions when the oil is ultimately burned. We covered the Keystone XL controversy in this article last fall. That same article predicts that Obama, too, long ago made up his mind to OK the pipeline. He just wants to sweep in the hopeful votes of the environmentalists before turning his back on them after the election.

There is no mention of Alaska in the white paper, but elsewhere — for example in his book, “No Apology” — Romney has shown that he is for drilling in the highly controversial Arctic National Wildlife Refuge, whereas Obama is not. He doesn’t need to champion drilling in the Beaufort and Chukchi Seas off northwest Alaska because Obama has already given Shell the go-ahead, despite significant risks, even after warnings to Congress by the commandant of the Coast Guard last August that the service has an inadequate presence in the area should there be a major spill or accident.

Romney’s position on coal comes to light early on in the white paper when he says, “President Obama has intentionally sought to shut down oil, gas and coal production in pursuit of his own alternative energy agenda". Development of coal, too, on federal lands would be part of the package turned over to the states and the white paper sends us to several sources that blame regulations for harming the coal industry and preventing the further building of coal-fired power plants. Again there is the qualifying language whereby the Romney plan would “strengthen environmental protection” but “without destroying jobs, paralyzing industry, or barring the use of resources like coal”.

Comedian Bill Maher says that “Republicans believe that putting the word ‘clean’ next to the word ‘coal’ creates something named ‘clean coal’. Romney doesn’t go that far, but Obama, from a coal-producing state that helps fund his campaign, has spoken the oxymoron repeatedly, even on the campaign’s website.