Obama, Democrats will emphasize administration’s track record on energy

September 4, 2012

Under assault from Republican presidential hopeful Mitt Romney, President Obama and other leading Democrats are planning a vigorous defense of the administration’s track record on energy issues, highlighting a sharp drop in oil imports, a doubling in renewable energy output and improved fuel efficiency in new vehicles.

Those improvements took place against a backdrop of rising U.S. oil and natural gas production, though the credit for that lies largely with the private sector’s advances in drilling technology and the strong incentives created by high crude oil prices.

U.S. oil production is higher than it has been since mid-1998. U.S. natural gas production is higher than it has ever been — creating controversy over drilling that uses hydraulic fracturing technology, but also helping the administration meet its goals for reducing greenhouse gas emissions.

“Our emphasis will be on the president’s ‘all of the above’ energy program,” Interior Secretary Ken Salazar said in advance of his speech at the convention Tuesday night. “From everything I have read and seen, including Gov. Romney’s speech in Tampa, they live in the same fantasy land of the past: that the ‘drill baby drill’ approach will get the United States to energy independence.”

“There’s actually quite a bit of overlap between Democratic and Republican policy right now,” said Jason Grumet, president of the Bipartisan Policy Center. “Both have the ‘all of above’ mantra. Both are supporting production increases and speaking proudly about the strength of the American energy resource. Both have suggested a strong desire for an increase in energy self-sufficiency.”

There are many key differences, however.

Energy experts agree that Obama can claim credit for getting automobile companies to agree in early 2009 to meet ambitious new fuel efficiency standards — standards Romney has opposed.

Those standards have already contributed to new vehicles getting 3 to 4 miles more for every gallon of gasoline, according to the University of Michigan Transportation Research Institute. Improvements are critical because U.S. cars and trucks consume more than one in every eight barrels of oil produced worldwide. Most oil company economists agree that U.S. motor fuel consumption has probably peaked as a result of the new standards; BP’s energy outlook, crediting government standards, says engine efficiency will double over the next 20 years.

Obama also set aside tens of billions of dollars in the economic stimulus bill for grants, loans and loan guarantees for renewable energy and new battery, solar and lighting technologies.

Republicans have criticized the programs as ill-fated efforts to help politically connected firms, including the now-bankrupt solar panel maker Solyndra, which received $535 million in federal loans. Because of the long-term nature of those investments, though, it may be years before it’s clear how good a job the Energy Department has done parceling out three times as much money as it ordinarily has in its annual budget.

But Democrats can say that Obama was able to double the nation’s output of wind and solar energy, and that there has been a substantial increase in the number of jobs created for workers making components of wind turbines or solar panels. Whereas Obama has backed production tax credits for wind projects, Romney is opposed to those tax credits.

Salazar said that Romney’s policy would “bring about a death knell to the wind industry, which has been a great job creator for the people of America.”

Romney also differs with Obama over the extent of drilling. While Obama has proposed an expansion of offshore waters open to oil and gas drilling, Romney would lift all restrictions, including on the Pacific and Atlantic coasts and the Arctic National Wildlife Refuge.

Romney would also take away the Interior Department’s authority to lease federal lands and give that to state governments. Romney argued that the move would speed up the pace of awarding drilling permits.

Salazar counters that “the public lands are a crown jewel of the United States. . . . We don’t think you ought to drill anywhere, anytime, recklessly as in the past. You have to have a balance.”

He added, “there’s no way we think it makes sense for American citizens to turn over those lands to private ownership or to give away public parks. . . . These treasures belong to the American people.”

Overall, the energy landscape today looks far different than it did just four years ago, when gasoline prices were sky high and the scarcity of oil and the need to address climate change topped the Democratic agenda.

The price of crude oil stood at $115 a barrel when Obama addressed his fellow Democrats in 2008 and vowed to end American oil addiction. He said then-Republican nominee Sen. John McCain had “said no to higher fuel-efficiency standards for cars, no to investments in renewable energy, no to renewable fuels. And today, we import triple the amount of oil as the day that Senator McCain took office.”

After a Republican convention punctuated with chants of “drill, baby, drill,” Obama in 2008 said that “drilling is a stop-gap measure, not a long-term solution. Not even close.”

Today, however, there is wider agreement on drilling. Despite the massive oil spill from BP’s Macondo well in the Gulf of Mexico in 2010, the Obama administration was able to reorganize the troubled agency overseeing offshore drilling and restore the level of exploration drilling to pre-spill levels. And last week the Obama administration gave Royal Dutch Shell the go-ahead to start preliminary drilling in the Chukchi Sea off Alaska’s Arctic coast while the company finishes preparations on a spill-control vessel.

Obama and fellow Democrats “will maintain that in the wake of Macondo that we’re back to where we were in production and drilling and output, but that now it’s smarter, better, cleaner,” said Frank A. Verrastro, director of the energy program at the Center for Strategic and International Studies.

While Romney and many independent oil exploration executives have complained about access to federal lands, Verrastro said that “we’re drilling as much as we can. I don’t know where you would put the stuff.”

Another key issue in 2008 was climate legislation, which then seemed like a genuine possibility. Since a cap and trade proposal was defeated in Congress, it has faded from the political landscape. The Obama administration has supported utilities that are substituting cheap natural gas for coal, thus making strides toward reducing greenhouse gases without legislation. The sluggish economy has also constrained greenhouse gas emissions.

Meanwhile, clean coal technology, which Obama mentioned four years ago, has been put on the back burner because it has proven to be far too expensive to be practical. The Environmental Protection Agency has negotiated the closure of many aging coal plants, though some utilities have complained about the timetable. Romney has accused Obama of trying to reduce coal use, something most environmentalists have applauded.

Obama has also set himself apart from Romney by withholding approval of the Keystone XL pipeline’s northern leg from the Canadian border in Montana to Steele City, Neb. He said he will decide on the fate of the pipeline early next year, if he is reelected.

On this issue, as on others, Obama has needed to pay as much attention to Democrats’ own ranks. Many environmentally oriented campaign contributors tried to make the Keystone XL pipeline a litmus test for the president. And others have been disappointed that he didn’t do more to win support for a federal renewable energy standard similar to those that have been adopted by a majority of state governments. Those state standards have propelled wind and solar projects in many areas even when economic incentives were not compelling.

Steven Mufson covers energy and other financial news.
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