Romney & Obama spar over gasoline prices, energy policy

10 17, 2012 by Fuel Fix

Energy policy took center stage at the opening of the second presidential debate, as Barack Obama and Mitt Romney sparred over whose proposals would do more to lower gasoline prices and boost drilling.

Climate change, meanwhile, got essentially no attention during the roughly 10-minute duel over energy at Hofstra University in Hempstead, N.Y.

Instead, the two candidates focused closely on how domestic energy production — chiefly oil and natural gas — could help revive the U.S. economy and lower gasoline costs.

Questioned about the government’s role in lowering gasoline prices, Obama insisted that the U.S. has control of its own destiny.

“The most important thing we can do is to make sure we control our own energy,” Obama said, adding a laundry list of accomplishments, including increased oil and coal production, as well as higher fuel economy standards. “We can’t just produce traditional sources of energy; we’ve also got to look to the future.”

Obama said he supports “opening new areas for drilling” as well as extracting natural gas from dense shale rock formations across the nation, while boosting efficiency.

Under Obama’s watch, domestic oil production has increased, but Romney noted that most of that growth has taken place on private lands outside the federal government’s control. “I want to make sure we use our oil, our coal, our gas, our nuclear, our renewables,” Romney said, casting Obama as a fossil fuel foe. “This has not been Mr. Oil, or Mr. Gas or Mr. Coal.”

A new University of Texas at Austin poll released Tuesday shows gasoline prices weighing heavily on voters just weeks before the Nov. 6 election; 92 percent of the survey respondents said they were concerned about the cost of fuel.

According to AAA, motorists are paying a national average of $3.77 for a gallon of regular gasoline, but it has topped $4 in seven states, including California, where the average price is $4.59. In Texas, the cost per gallon is about $3.53, according to the automobile association.

Obama and Romney clashed over the government’s power to affect prices at the pump, with Romney suggesting that there was a direct correlation between federal drilling permits and lower prices from increased domestic production.

“The proof of whether a strategy is working is what you’re paying at the pump,” Romney added, noting that gas prices have gone up during Obama’s White House tenure. “if the president’s energy policies are working, you’re going to see energy prices go down.”

However Romney’s equation ignores the reality that oil prices are set globally. For instance, OPEC countries can choose to decrease their own production to make up for new U.S. supplies. Escalating global demand also can outpace production worldwide and keep prices high. Political unrest in the Middle East — along with economic woes in Greece and other countries — also have played a role recently.

In one especially combative exchange, Romney accused Obama of stifling domestic oil development. Here’s how it went down:

Romney: In the last four years, you’ve cut permits and licenses on federal lands and waters in half.”
Obama: It’s not true, Gov. Romney.
Romney: So how much did you cut them by?
Obama: It’s not true.
Romney: How much did you cut them by, then?
Obama: Governor, we have actually produced more oil –
Romney: INo, no, how much did you cut licenses and permits on federal lands and federal waters?
Obama: Governor, here’s what we did. There were a whole bunch of oil companies –
Romney: II had a question and the question was how much did you cut them by? How much did you cut them by?
Obama: You want me to answer. I’m happy to answer the question. Here’s what happened. You had a bunch of oil companies who had leases on public lands that they weren’t using. So what we said was you can’t just sit on this for 10, 20, 30 years, decide when you want to drill, when you want to produce, when it is most profitable for you. These are public lands. If you want to drill on public lands, you use it or you lose it. So what we did is take away those leases and are now reletting them.”
Romney: Production on government land of oil is down 14 percent and production of gas is down 9 percent. We have not produced more oil and gas on federal lands and federal waters. And coal production is not up. Coal jobs are not up.”

Obama was referring to the Interior Department’s move to boost annual rental rates for offshore acres that are leased but haven’t started producing oil. The government also shortened the leasing times for initial drilling in some shallower water depths and hiked the minimum bid for some offshore tracts from $37.50 to $100 per acre.

Offshore drilling leases generally span seven to 10 years — not the decades that Obama suggested.

Industry leaders have insisted that they have no reason to lease land and let it sit idle. They have pointed to sometimes-long lead times between buying leases and winning federal regulators’ approval to drill on those tracts as well as the the time needed to assess leases geologically before launching exploration.
After the Gulf of Mexico oil spill in 2010, the Obama administration imposed a five-month moratorium on most deep-water exploration. Permitting of shallow-water drilling projects also slowed for a time after offshore regulators imposed new drilling rules in the wake of the disaster.