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John Daly

John Daly

Dr. John C.K. Daly is the chief analyst for Oilprice.com, Dr. Daly received his Ph.D. in 1986 from the School of Slavonic and East European…

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Romney Energy Plan - Good or Bad for America? - Part One

On 22 August, the Republican campaign released its “The Romney Plan For A Stronger Middle Class: ENERGY INDEPENDENCE.”

In its “Executive Summary,” the White Paper lists the “Romney Agenda” six points as: “empower states to control onshore energy development; open offshore areas for energy development; pursue a North American Energy Partnership; ensure accurate assessment of energy resources; restore transparency and fairness to permitting and regulation; and facilitate private-sector-led development of new energy technologies.”

While it is beyond the scope of these three articles to comment point by point on this proposal, a number of issues raised nevertheless are relevant, given that the Romney white paper states in its introduction, “Romney’s path forward would establish America as an energy superpower in the 21st century.”

Is the document actually a step “forward,” “business as usual,” or retrograde?

The report emphasizes enhancing America’s traditional coal and oil industries, according to the document, stymied by burdensome federal regulation, as well the U.S. surging production of natural gas via hydraulic fracturing, or “fracking.”

Shorn of vague platitudes, the Romney plan is pro-drilling, anti-regulation and criticizes the Obama administration for funding renewable energy alternatives, while containing no mention of climate change or CO2 carbon issues, a topic of increasing concern to many governments worldwide. Romney insists that the U.S. will need to open up more federal lands and waters to oil and natural gas drilling, the federal government will need devolve more power to states to approve permits to increase drilling and the U.S. must partner Canada and Mexico to utilize their energy resources to promote “North American energy independence by 2020.” A small but interesting point – “North American energy independence” is not U.S. energy independence, but rather, leaves the U.S. beholden to Canadian and Mexican energy policies.

The 21 page document contains vague 80 sentences outlining the Romney-Ryan energy strategy for the next four years, but 99 “Did You Know?” references designed to bolster support for Romney’s energy agenda, culled from disparate sources ranging from the federal agencies, including the Energy Information Agency, through the New York Times (6 references), Wall Street Journal (3 references), Washington Post (3 references), Britain’s Financial Times (2 references), Canada’s Globe and Mail (1 reference)  and USA Today (5 references) newspapers through the New York headquartered international financial conglomerate Citigroup, which appears six times.

The “Did You Know?” sections are the bulk of the white paper, and their sources range from government agencies to private financial institutions, all carefully cherry-picked to appear strongly supportive of Romney’s energy agenda. Accordingly, the white paper should be treated with caution for those seeking an objective oversight of America’s current energy situation, much less its future.

These sections are not designed not so much as to bring Romney supporters onboard but rather, to convince undecided voters that the Romney agenda is progressive and that the Obama administration has been blocking the points outlined in the manifesto.

Underlining the selectiveness of the “Did You Know?” sections is the fact that the credibility of several of the financial institutions, much less the “think tanks” cited as ostensibly objective, is suspect.

Several of the fiscal institutions cited being used to promote a Romney presidency have nevertheless benefitted from the Obama administration’s fiscal support. Top of the list is Citigroup, which in May CNN reported that was one of the Romney’s campaign’s six largest donors.(Charles Riley, “Wall Street ditches Obama, backs Romney,” 29 May 29 2012 @ http://money.cnn.com/2012/05/29/news/economy/romney-obama-wall-street/index.htm.)

In 2008 Citigroup became one of the biggest recipients of the Obama administration’s Troubled Asset Relief Program, or TARP bailout money, with the Obama administration injecting $45 billion into Citigroup to help stabilize the embattled lender, leading Citigroup CEO Vikram Pandit to say that his firm owed American taxpayers "a debt of gratitude.”(David Ellis, “Citigroup strikes deal to repay TARP,” CNN Money, 14 December 2009 @ http://money.cnn.com/2009/12/14/news/companies/citigroup_tarp/index.htm.)

Raymond James Financial, a diversified holding company describes itself on its website as having “total client assets exceed(ing) $370 billion,” and has three references in the Romney energy document. In November 2008 the firm applied for TARP funding. On 20 November, 16 days after President Barack Obama won the presidency, Raymond James CEO Thomas James saw his company’s fiscal future as sufficiently grim that he said in a statement that if his firm was accepted and decided to participate in the program, the funds would be used “as a replacement for our previous and current unsecured credit lines and as a means of obtaining additional capital.”(Dan Jamieson, “Raymond James applies for TARP funds,” Investment News, 21 November 2008 @ Investmentnews.com. Raymond James eventually decided against applying for TARP fiscal relief.

Renewable energy gets short shrift in the Romney white paper, being referred to three times, the first being “(To) ensure that policies for expanding energy development apply broadly to energy sources, from oil and gas exploration, to coal mining, to the siting of wind, solar, hydroelectric, and other renewable energy facilities…”. The other two references are encompassed in the “Did You Know?” reference, “Environmentalists Block Wind And Solar Projects Just As They Do Fossil Fuel Projects…”

Another topic notable by its absence is fuel efficiency. On 29 July 2011 the White house announced new federal requirements for improving fuel efficiency for America’s fleet of automobiles and trucks. The new standards, covering cars and light trucks for model years 2017-2025, will require performance equivalent to 54.5 miles per gallon in 2025. By 2025, the new mpg standards will reduce oil consumption by an estimated 2.2 million barrels a day.

Did You Know?

The oil and natural gas industries, by the week before the Romney white paper’s release, saw industry employees and their families had contributed $4 million to the Republican National Committee, its sixth-largest source of donations, according to the Washington D.C. Center for Responsive Politics, while industry political action committees represented the 10th-biggest donors to the Romney campaign.(Jim Snyder and Kasia Klimasinska, “Bloomberg News - Oil Donors Fete Romney Days Before Unveiling Energy Plan,” 24 August 2012 @ http://www.businessweek.com/news/2012-08-24/oil-donors-fete-romney-days-before-unveiling-energy-plan).

In the 2012 election cycle thus far, the U.S. oil and natural gas industry has given 87 percent of its $8.74 million in contributions to Republican candidates, with the remaining 13 percent going to Democratic candidates.(Ed Crooks, “Oil industry presses Obama on regulation,” Financial Times, 2 September 2012 @ http://www.ft.com/cms/s/0/a10000b8-f50e-11e1-b120-00144feabdc0.html).

Parts 2 and 3 will discuss the six specific Romney recommendations in detail.

Click here for Part 2

By. John C.K. Daly of Oilprice.com

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  • tom monahan on September 14 2012 said:
    The TARP bailout was initiated by the Bush Administration, before the now current Obama administration was elected.

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