While the presidential election isn’t until November, it’s already clear that Mitt Romney has won over America’s oil and gas industry.
Days removed from fundraisers attended by Exxon Mobil Corp. (XOM)’s Chief Executive Officer Rex Tillerson and Continental Resources Inc. (CLR) Chairman Harold Hamm, Romney called for the aggressive development of fossil fuels to make the U.S. an “energy superpower” in a 21-page plan released yesterday.
Opening the Atlantic coast to oil and gas production and giving states control over energy development on the federal lands within their borders, would help achieve North American energy independence by 2020, create 3 million jobs, and add $1 trillion to federal, state and local government budgets, according to the plan.
Oil industry executives lauded the proposal. Democrats said it would weaken federal environmental safeguards.
“The Romney plan demonstrates a very clear understanding of how America’s oil and natural gas companies, like mine, work,” Virginia Lazenby, the chairman of Bretagne LLC, an oil and gas company based in Nashville, said in a statement released yesterday by the Independent Petroleum Association of America.
“The states, not bureaucrats from Washington, best know how to protect the environment while allowing for responsible American energy production,” said Lazenby, who is also chairman of the Washington-based trade group.
Energy has been a major topic in the election as gasoline prices rally to record levels for this time of year. Nationwide, prices at the pump rose 1.2 cent to $3.73 a gallon yesterday, AAA data showed. Prices have climbed 40.4 cents since July 1, according to the AAA data.
“This is not some pie-in-the-sky kind of thing,” he said.
The speech capped a week of energy events as Romney, the presumed Republican presidential nominee, seeks to use the issue as a springboard for a broader discussion about the U.S. economy, where unemployment remains above 8 percent.
As governor of Massachusetts, Romney once vowed to close a coal plant because it “kills people.” As a presidential candidate he has embraced fossil fuels as an engine for economic growth.
President Barack Obama has spent too much time and money promoting clean-energy sources like wind and solar power, while neglecting fossil fuels that drive the economy, Romney has said.
The White House says oil and gas production has increased during Obama’s first term, driving down U.S. dependence on foreign oil to its lowest level in almost 20 years.
On Aug. 21, Romney attended an energy roundtable in Houston with Tillerson, Hamm, and Richard Kinder, the head of energy pipeline and storage company Kinder Morgan Inc. (KMI) The event was part of a series of fundraisers expected to raise as much as $7 million for his campaign.
“What’s a surprise to me is how politically entrenched with the Republican Party the oil industry continues to be,” he said in a phone interview.
Before this week, oil and gas employees and their families had contributed $4 million to the Republican National Committee, its sixth-largest source of donations, according to the Center for Responsive Politics, a Washington-based research group.
The industry, through political action committees, is the 10th-biggest giver to the Romney campaign. Employees working in the energy and natural resources sector contributed $4.2 million to Romney compared with $1.3 million to Obama.
Exxon, Continental Resources and Hess Corp. (HES) would all potentially benefit from Romney’s energy plan. The companies hold leases in the Bakken shale formation in North Dakota.
By giving states control of energy development within their borders, Romney seeks to boost production. The U.S. takes more than 300 days to issue a permit for a project, according to the Romney campaign white paper. North Dakota issues one in as little as 10 days.
Romney said the federal permitting process was “extraordinarily slow.”
Romney’s plan for “energy independence in North America benefits all Americans,” Kristin Miskovsky, a spokeswoman for Continental Resources, said in an e-mail.
Environmental groups and alternative-energy advocates said the plan gives away too much to the industry.
The plan is a “sop to the oil and gas and coal guys who would rather deal with the states,” said John Leshy, a professor at the University of California’s Hastings College of law and former general counsel to the Interior Department during President Bill Clinton’s administration. “The states don’t regulate as tough.”
Environmentalists objected to the expansion of drilling in the Atlantic coastlines.
Drilling there “would have profound implications for the Southeast,” said Stephen Smith, executive director of the Southern Alliance for Clean Energy, headquartered in Knoxville, Tennessee.
“We still have people that have been negatively affected by the spill in the Gulf,” Smith said.
While presidents since Nixon have promoted U.S. energy independence, the U.S. has made progress toward the goal in recent years.
Net petroleum imports reached 60 percent of U.S. supplies in 2005 fell to 45 percent of the total last year.
Adam Sieminski, the head of the U.S. Energy Information Administration, which tracks and analyzes energy data, said in an interview Aug. 22 that imports could fall to 42 percent of the total this year, the lowest level in two decades.
Virginia Governor Bob McDonnell, the chairman of Republican Governors Association, praised the Romney plan for creating “good-paying jobs” for Americans.
“The president has said no to those new jobs, Mitt Romney is saying yes,” McDonnell said in a statement distributed by the Romney campaign last night. “Mitt Romney will replace the road blocks of the Obama administration with the real leadership the states need to responsibly develop our bountiful energy resources.”
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