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Obama, Romney sing same tune on energy independence

Future American president will be looking at booming oil, gas and clean energy sectors to lift the US economy, writes Clifford Krauss.

world Updated: Oct 30, 2012 02:11 IST

“Drill, baby, drill.” It is the best-remembered line of the 2008 presidential campaign, one that colourfully captured the desire of many Americans for cheap, reliable energy produced at home rather than in unpredictable places like Iran or Venezuela.

No slogan in the current presidential campaign has emerged to match it, but energy has taken centre stage again as an issue that encompasses concerns about the environment and national security, and now, even more pressingly, economic revival.

Presidential campaigns have a way of producing stark contrasts between candidates. In the presidential debates, President Barack Obama and Mitt Romney clashed sharply on fossil fuels and renewable energy.

The Republican nominee accused the president of picking a lot of losers with $90 billion worth of government largess for Solyndra, the California solar company, and other green enterprises. "And by the way, I like coal," he said in the first debate. Obama countered that the oil industry was the true recipient of "corporate welfare" in tax breaks: "Does anybody think Exxon Mobil needs some extra money, when they’re making money every time you go to the pump?"


But such differences may be more rhetorical than real; the marketplace, technological change and West Asia tensions are driving Obama and Romney to much the same place on the country's energy future.

Both candidates say they support nuclear power and biofuels, though neither is advocating strongly for either. Both say they want to encourage more oil drilling in places like North Dakota, Texas and Alaska to lower dependence on oil from the Middle East. Even while the Environmental Protection Agency has more aggressively regulated mining and drilling, Obama, like Romney, has celebrated the boom in domestic natural gas production and wants to spread its use for power production and even export.

In a twist few would have predicted when Obama first entered the White House and much as it may dismay him, fossil fuels have eclipsed renewable energy and climate change in the national discussion - even as climate scientists warn that the droughts that scorch corn crops and the faster melting of Arctic ice and glaciers around the world are signs of things to come.

"Last time we were electing a president, it looked like we were running out of energy, and this time we're debating how to use what now seems to be ample resources for decades to come," energy historian Daniel Yergin said. "The country needs to decide the pace and scale of domestic energy development as well as the mix among oil, natural gas, coal, renewable and nuclear we will use. But the marketplace itself will have a bigger role than the election campaign in what the mix eventually will be."

The oil and shale gas drilling boom is reshaping the nation's energy map, and it is still difficult to predict the extent of its ramifications. With domestic oil production climbing rapidly since 2008, oil imports have been cut to just over 40% of domestic supplies, the lowest level in two decades, from 60%.

Over the same period, domestic natural gas production has risen by 15%, producing a glut that has forced down the gas price by nearly two-thirds. Plentiful, cheap natural gas has crowded out much of the expected growth of renewable energy like wind and solar power, but it has cut domestic consumption of dirtier coal even more sharply.

Electrical generation from wind, solar, geothermal and biomass have expanded to 5.8% of the country's electricity, from 3.1%, since Obama took office, partly because of tax incentives and other support from the administration's stimulus package. But the expansion of power driven by natural gas has arguably been even more impressive. Cheap natural gas today fuels a bit more than 30% of American power production, up from just over 20% in 2008.

On the stump, Obama has not been shy in heralding the boom in domestic oil and gas drilling under his watch. Not to be outdone, Romney has put "energy independence" at the top of his five-point plan to produce millions of jobs.

Energy politics have shifted because a persistently sluggish economy with roughly 8% of American workers unemployed has made it a pocketbook issue. The oil and gas boom has produced one of the economy's few bright spots. Drilling and support jobs have increased by nearly 25% since the first half of 2008 to nearly 200,000 jobs, despite the financial collapse and recession. Those jobs pay about $34.50 an hour, nearly 50% higher than the national average. A refinery boom based on new domestic oil and gas production has made the US a refined petroleum product net exporter for the first time since the Truman administration.

Michael Webber, associate director of the Centre for International Energy and Environment Policy at the University of Texas at Austin sums up the scenario: "Obama would speed it up and Romney would slow it down, but it will happen regardless. Even the president, as powerful as he is, cannot overcome the fundamentals of the market, and the market says coal's days are numbered and the market sees gas as the rising star." NYT