An energy adviser to Republican Mitt Romney said drilling advances are putting the U.S. on course to emerge “from under OPEC dominance,” while the Obama administration is stalling development with excessive rules.
“There is an entire new world of geology out there that’s awaiting us,” Harold Hamm, chief executive officer of Continental Resources Inc. (CLR) and a Romney aide, said today at a House Energy and Commerce Committee subcommittee hearing.
Federal regulations hinder development by delaying the permits needed to work, and Hamm said as a result his Oklahoma City-based company avoids drilling on federal lands. He said he wasn’t representing the campaign in his testimony.
Democrats led by Representative Henry Waxman of California said the boom in U.S. energy development rebuts that criticism, and policies such as higher fuel-efficiency standards for cars and trucks are helping lower demand, helping reduce oil imports.
Republicans called the hearing to discuss goals for North American energy independence, which Romney has said could be achieved by 2020 if he wins election. While drilling advances such as hydraulic fracturing, or fracking, are boosting U.S. output, Democrats and Republicans disagreed over whether federal policies hurt or help production.
Committee Chairman Fred Upton, a Michigan Republican, said a “genuinely transformative energy revolution has emerged, and it has happened in spite of” administration policies.
Oil production climbed to almost 6.2 million barrels a day this year, from less than 5 million barrels in 2008, helping reduce imports to 42 percent of total consumption from more than 60 percent in 2005, according to the Energy Information Administration. The agency projects imports will fall to about 36 percent in 2035.
Through “fracking,” a process that injects a mixture of water, sand and chemicals thousands of feet below the surface, companies like Continental can access fossil fuels trapped in shale rock formations, whereas conventional techniques require the oil to flow to the well, Hamm said.
Waxman said the Republicans’ energy plans were too reliant on fossil fuels, which when burned release gases that scientists have linked to climate change.
He said Romney’s energy plan was “backwards looking.”
The choice is “all-of-the-above, or oil-above-all,” Waxman said.
While the EIA projects a slow decline in imports, several analysts are even more optimistic about U.S. production gains, largely from fracking and offshore output in the Gulf of Mexico.
Citigroup Inc. (C) projects the nation will produce 14.1 million barrels a day of oil and natural-gas liquids by 2020, up from this year’s daily rate of 8.6 million barrels and an increase of almost 90 percent from 2010.
Daniel Ahn, Citigroup’s chief commodities analyst, said the energy boom can act as a minor industrial revolution that could create as many 3.6 million jobs in oil and gas companies and associated industries.
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