Bloomberg News

Perry Blames Obama for Energy Costs, Backs Alaska Drilling

October 14, 2011

(Updates with Perry quotes starting in first paragraph. For more election news, see {ELECT <GO>.})

Oct. 14 (Bloomberg) -- Republican presidential candidate Rick Perry accused President Barack Obama of “intentionally” pushing up oil and gas prices to “drive consumers to green energy,” as the Texas governor called for opening up swaths of Alaska and other areas to oil drilling.

“The quickest way to give our economy a shot in the arm is to deploy the American ingenuity to tap American energy,” Perry today said at U.S. Steel Corp.’s Mon Valley Works in West Mifflin, Pennsylvania, near Pittsburgh.

In his first major economic policy speech as a White House candidate, he said expanding domestic energy exploration would create 1.2 million jobs.

“My plan will break the grip of dependence that we have today on foreign oil from hostile countries like Venezuela and those unstable Middle Eastern countries,” Perry said. “It will allow us to grow jobs and our economy.”

Perry, 61, who soon after entering the Republican presidential race in August led in polls on the strength of his job-creation record and his appeal to conservatives, now trails former Massachusetts Governor Mitt Romney and businessman Herman Cain. Perry is seeking to shore up his economic credentials and standing with the party’s conservative wing.

‘Kill Jobs’

Speaking in front of rolls of steel coil manufactured at the plant and a giant American flag suspended from a crane, Perry framed his candidacy as a choice between economic growth and Obama’s policies.

“When it comes to energy, the president would kill domestic jobs through aggressive regulations, while I would create 1.2 million American jobs through safe and aggressive energy exploration right here at home,” Perry said.

He said the Environmental Protection Agency has waged “a war on American fossil fuel production.”

Perry would suspend and reconsider all new clean air regulations, repeal the EPA’s authority over greenhouse gases, and cut the agency’s budget by 60 percent, his campaign said in a policy paper issued today. He also would limit the EPA’s enforcement authority to “national or regional issues for which the individual states seek arbitration or assistance,” the policy paper said.

No Accident

High energy prices during the Obama administration are “not an accident,” and instead are “intentional,” Perry said in his speech.

Obama campaign spokesman Ben LaBolt dismissed Perry’s criticism as “doubling down on finite resources with no plan to promote innovation or to transition the nation to a clean-energy economy.”

The president’s strategy has “created hundreds of thousands of jobs in the clean-energy sector,” and his securing an agreement of fuel-economy standards will strengthen energy security, LaBolt said in an emailed statement.

During the Obama administration, imports of foreign oil declined 9 percent to 4.3 billion barrels in 2010 from 4.73 billion barrels in 2008.

U.S. oil production reached 5.47 million barrels a day in 2010, the highest level since 2003. Output from the federal waters of the Gulf of Mexico rose to 1.56 million barrels a day in 2009 from 1.15 million barrels in 2008. It was 1.55 million barrels a day in 2010, when BP Plc’s Macondo well exploded in the gulf. New drilling permits were temporarily suspended after the explosion in April 2010.

Perry said he would create energy-related jobs by returning drilling permits in the Gulf of Mexico to 2007 levels, expanding exploration in the Beaufort and Chukchi seas off Alaska, and allowing drilling in Alaska’s Arctic National Wildlife Refuge.

Everglades Exempt

“Ecological treasures, like the Everglades or Yellowstone National Park” would be kept off limits to oil exploration,” Perry said. He said he’d respect states’ decisions not to drill in certain areas, “but those instances are truly the exception.”

Taking aim at Obama’s efforts to promote clean energy, Perry said he would “level the competitive playing field among all of the energy producers” by stopping subsidy checks to “any and all sectors of the energy industry,” as well as “industry-specific tax credits,” which he would phase out over time.

In an op-ed in the New Hampshire Union Leader published on Oct. 11, Perry said his plan would increase domestic oil production by 25 percent.

Perry’s Appeal

Much of the recent private-sector growth in Texas was generated by its energy industry and a boom in oil prices. Perry’s appeal as a candidate stressed the state’s job growth during the recession and a philosophy of low taxes and regulatory restraint.

While Perry has suffered from criticism of his performance in televised debates and a backlash among social conservatives against his support for allowing in-state tuition for children of illegal immigrants living in Texas and a mandate he backed as governor to vaccinate schoolgirls against the human papillomavirus, he also has been eclipsed by Romney and Cain on the economy.

Among Republicans and Republican-leaning independents, 22 percent named Romney as the candidate who would most improve the economy, followed by Cain at 20 percent in an Oct. 6-9 Bloomberg-Washington Post National poll. Perry was the choice of 12 percent on that question.

Romney was backed as the choice to be the party’s nominee by 24 percent, with Cain second at 16 percent and Perry third at 13 percent. All other contenders were in single digits.

Cain’s Proposal

Cain has promoted a “9-9-9” plan that would replace the tax structure with 9 percent flat business tax and individual income tax rates and a 9 percent national sales tax. Romney, who founded Boston-based private equity firm Bain Capital LLC, has stressed his business background and offered a 59-point economic program.

Perry has said that Cain’s plan would increase sales taxes for states, making it difficult to gain passage.

“It sounds pretty cool to just say 9-9-9, but at the end of the day it’s a really big tax increase,” he said in an interview today on ABC’s “Good Morning America.” “It’s going to be tough sledding for 9-9-9.”

In the Bloomberg News/Washington Post Republican presidential debate Oct. 11, Perry called for an “American declaration of independence” on energy.

Fall Short

If Perry succeeded in increasing domestic oil production by 25 percent, the nation’s domestic supply still would fall far short of liquid-fuel consumption, based on data compiled by Bloomberg from projections by the U.S. Energy Information Administration.

The EIA projects the U.S. would rely on imports for about 42 percent of its liquid-fuel consumption in 2035, down from about 50 percent currently. The increase in domestic output Perry envisions would leave the country importing 35 percent of its needs in 2035, according to data compiled by Bloomberg.

Some of the biggest financial backers of Perry’s gubernatorial campaigns include executives and investors in energy companies, according to Texans for Public Justice, an Austin-based watchdog group.

The list includes executives of Belmont Oil and Gas Corp. J. Ralph Ellis Jr., president of Belmont Oil and Gas Corp. in Irving, Texas, and Joy Ellis, who gave $420,000 to Perry’s gubernatorial campaigns; Paul Foster, chairman of El Paso, Texas-based Western Refining Inc., who gave $408,758, and T. Boone Pickens, chairman of Dallas-based BP Capital LLC, who gave $377,500.

Perry’s wife, Anita, said yesterday that her husband had been “brutalized” in the press and by his Republican rivals because of his Christian faith and status as the “only true conservative” in the race, comments Perry told ABC’s “Good Morning America” that he stood by.

“She’s right,” he said. “She’s hit me on my mark both times there.”

--With assistance from Tony Costello, Rich Heidorn Jr., Jonathan Salant, Kasia Klimasinska, Joshua Green, Alex Wayne and Alison Fitzgerald in Washington. Editors: Robin Meszoly, Don Frederick

To contact the reporter on this story: Mike Dorning in West Mifflin, Pennsylvania, at mdorning@bloomberg.net; Lisa Lerer in Washington D.C. at llerer@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net.


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