Bloomberg News

Romney Energy Plan Would Expand States’ Say in Production

August 23, 2012

BRomney Energy Plan Calls for East Coast Drilling to Cut Imports

U.S. Republican presidential candidate Mitt Romney disembarks from his campaign plane at Adams Field Airport in Little Rock, Arkansas, on Aug. 22, 2012. Photographer: Jewel Samad/AFP/Getty Images

Mitt Romney would seek to give states control over energy production on federal lands within their borders and allow drilling off the East Coast as part of his plan to reduce crude oil imports.

With rising gasoline prices again drawing voter attention to U.S. energy policy, the presumptive Republican presidential nominee highlighted his energy proposals today in Hobbs, New Mexico, including his strategy for obtaining North American energy independence by 2020, in which the U.S., Canada and Mexico would produce all their own oil.

“It is achievable,” Romney told supporters at Watson Truck and Supply. “This is not some pie-in-the-sky kind of thing.”

He also said his energy plan would create 3 million jobs.

Energy is a “high-priority issue for American voters” and one the campaign plans to stress in coming weeks, Romney adviser Ed Gillespie told reporters yesterday.

The plan, which includes proposals Romney has already discussed, calls for approving the Keystone XL pipeline to carry tar sands crude from Alberta to refineries along the U.S. coast of the Gulf of Mexico.

President Barack Obama in January rejected a permit application from TransCanada Corp. (TRP), the project’s sponsor, after Nebraska officials raised concerns that the pipeline could threaten the Ogallala aquifer. The Obama administration is reviewing a revised proposal.

State Control

Romney’s plan also would give states control over energy production on millions of acres of land now under federal authority, as well as open territory off the coasts of Virginia and the Carolinas to oil and gas producers for the first time. Companies drilling on federal lands include Exxon Mobil Corp. (XOM:US), Hess Corp. (HES:US) and Continental Resources Inc. (CLR:US)

These “opportunities have existed for a long time, we just haven’t taken advantage of them,” Romney told the crowd in Hobbs.

Drilling offshore could produce an additional 2 million barrels of oil a day, Romney said.

Improve Process

Giving states control of energy production on federal land within their boundaries would skirt a federal permit process that is “extraordinarily slow,” Romney said.

Heather Taylor-Miesle, director of the Natural Resources Defense Council Action Fund, said Washington should retain control over energy production on federal lands.

“They are national treasures,” she said in an interview. “That’s why they are federal lands, they benefit every American.”

A white paper that lays out the plan says Romney would keep certain U.S. lands off-limits without specifying which ones.

The Interior Department leases about 6 percent of federal lands, or more than 38 million acres, an area roughly the size of Georgia, for onshore oil and gas exploration, according to a Bloomberg Government June 21 study.

There may be a renewed focus on energy as gasoline prices again rise. Prices averaged $3.72 in the U.S., up from $3.47 a month ago, according to the latest daily report from the AAA, the nation’s largest motoring organization.

Attacking Subsidies

Romney and Republican groups have criticized Obama for what they say is a waste of billions of taxpayer dollars on clean- energy subsidies, including a $535 million loan guarantee to Solyndra LLC, the solar-panel maker that went bankrupt, as fossil-fuel production on federal lands has fallen.

Obama has said total oil and gas production is up, which accounts for development on private lands.

Imports fell to about 45 percent of U.S. demand last year, down from a peak of 60 percent in 2005, according to the Energy Information Administration, which tracks and analyzes energy data. This year, the country’s dependence on imported crude oil should fall to about 42 percent, Adam Sieminski, head of the EIA, said in a telephone interview yesterday.

Obama says he supports an “all-of-the-above” energy policy that includes more oil and gas development as well as extending tax breaks that favor renewable energy sources like wind power, which Romney opposes.

To contact the reporters on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net Roxana Tiron in Hobbs, New Mexico, at rtiron@bloomberg.net

To contact the editor responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net


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Companies Mentioned

  • XOM
    (Exxon Mobil Corp)
    • $97.12 USD
    • 0.51
    • 0.53%
  • HES
    (Hess Corp)
    • $97.51 USD
    • -0.22
    • -0.23%
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