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Energy in the Time of Elections: Claims and Counterclaims

Energy in the Time of Elections: Claims and Counterclaims

Where there's oil and gas, there's milk and honey.

That is the thrust of the American Petroleum Institute's report to the platform committees of the Republican and Democratic parties. It was previewed in Washington on May 15 by API President and CEO Jack Gerard, the oil industry's man on Earth, known for his tough attitudes to just about everything, but the Obama Administration in particular.

In unveiling the report at the National Press Club, Gerard declared that the recommendations were without political slant and were delivered to both parties’ platform committees without favor; although it is generally known that the oil and gas industry -- and Big Oil in particular -- cares not a jot for the Democrats. In a slip, while reading a prepared statement, Gerard referred to the “Democrat Party,” which is a term used by conservative commentators and members of the Republican Party who cannot stand the thought of  Democrats having a monopoly on the word democratic.

As expected, and in line with other recent utterances, Gerard called for accelerated leasing on federal lands, demanded more sensitive regulation, and declared his belief that the United States is potentially the greatest energy producer on Earth.

The White House shot back at API almost immediately, claiming it is the oil the industry that is lagging not the government.

Not to be outshot, Gerard said, “Once again, the administration is trotting out claims about idle leases to divert attention from the fact it has been restricting oil and natural gas development, leasing less often, shortening lease terms, and going slow on permit approvals—actions which have undermined public support for the administration on energy. It is also increasing or threatening to increase industry’s development costs through higher taxes, higher royalty rates, and higher minimum lease bids.”

Even if the administration is right this time, it has a hard sell ahead.
In the case of natural gas, there has been a giant windfall from shale seams; but that has been coming for some time, and the administration can take no particular credit. Similarly, oil imports are down from 57 percent to 45 percent, reflecting increased domestic production, something that helps more with the balance of payments than the price at the pump.

Gerard admitted that while natural gas prices are at historic lows because of new recovery and drilling technology, oil is priced internationally and that is no help to American consumers. API and its chief tend to conflate oil and gas to make a point. Likewise, they like to include Canada in “North American” energy.

But the energy claims of the administration are even harder to follow and more dubious. It likes to confuse fossil fuels – coal, gas and oil -- with electricity and, in particular, with alternative energy, like wind, solar and, in a manner of speaking, nuclear.

Most energy gurus see the dawning of a switch from oil to electricity for personal transportation, for buses and some trucks. But that dawn is breaking slowly with consumer indifference, battery life questions and other problems, including the availability of rare earths for motors and wind turbines.

Experience suggests that energy is a lousy political issue. It is complicated; each side has its own facts and there is some truth to both sides’ facts.

At the end of the day, the energy debate is reduced not to the amount of drilling taking place on federal lands, or to the virtues of natural gas over nuclear, but to the price of gasoline at election time. If that is lower than it is today, Obama garners votes. If it is up, no matter why, all the GOP and Mitt Romney have to say is that it is Obama's fault.

The money vote is known already: With a very few exceptions the energy money is on the GOP. But that is not new. What is new is that environment is not on the agenda. Better wait until 2016.

By. Llewellyn King

Llewellyn King is executive producer and host of “White House Chronicle” on PBS. His e-mail is lking@kingpublishing.com.




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