Oil, gas issues quickly surface in first Obama-Romney debate
Oil and natural gas issues quickly appeared as US President Barack Obama and former Massachusetts Gov. Mitt Romney met on Oct. 3 in the first of three debates. The Democratic and Republican presidential nominees agreed that more US energy should be developed, but disagreed over details.
Romney mentioned North American energy independence by 2050 as the first of five major goals in his opening statement. Obama noted that both nominees agreed that US energy production needs to increase. US oil and gas output is up, he noted, but developing new forms of energy also is important.
“Energy is critical,” Romney responded. “It’s true that production is up, but not due to [the president’s] policies. All the oil and gas growth has been on private and state land. Production actually is down on federal land.”
Romney said that if he is elected, he would immediately approve the Keystone XL Pipeline Project’s cross-border permit, and push for more crude oil production in Alaska.
The nominees also agreed that a strategy of balancing increased federal revenue and budget cuts is essential to address the looming fiscal crisis. Obama said a good first step would be to eliminate tax code provisions that favor the largest US oil companies.
“The oil industry essentially gets $4 billion/year in corporate welfare,” he declared. “Does anybody think, when they go to fill up at the pump, that ExxonMobil needs that?”
Romney said the US Department of Energy estimates that favorable federal oil and gas tax provisions actually are closer to $2.8 billion/year. “It largely goes to small, independent operators,” he continued. “But if we get tax rates down to 25% from 38%, these breaks should be on the table.”
Industry reactions
Two oil and gas associations immediately responded to issues raised in the debate. “Significantly, both presidential candidates recognize the oil and natural gas industry as a robust economic engine that is creating jobs, sending billions of dollars to the government each year, and making our country more energy secure,” American Petroleum Institute Pres. Jack N. Gerard said.
“The next president must implement a national energy policy and lift existing restrictions on the responsible development of our vast energy resources, approve the Keystone XL pipeline, avoid burdensome regulations that chill economic investment, and resist the urge to regulate the very technologies that have made our energy boom possible,” Gerard said.
In Denver, where the debate was held, Western Energy Alliance Pres. Tim Wigley echoed Romney’s observation that recent US oil and gas production growth occurred outside federal acreage, which the Obama administration controls.
“The primary reason North Dakota has been so successful is that most of its oil production comes from state and private lands,” he indicated. “The Romney Energy Plan draws from the North Dakota model by empowering states with a greater role in conducting environmental review and issuing permits.”
Contact Nick Snow at [email protected].
Nick Snow
NICK SNOW covered oil and gas in Washington for more than 30 years. He worked in several capacities for The Oil Daily and was founding editor of Petroleum Finance Week before joining OGJ as its Washington correspondent in September 2005 and becoming its full-time Washington editor in October 2007. He retired from OGJ in January 2020.