What are the Final Obama and Romney Energy Plan Changes?
Our presidential candidates have completed their debates on the economy, foreign policy and energy. Now that we are about a week away from the election, what final changes have President Obama and Governor Romney made in their ‘energy plans’ to address our Country’s concerns following the debates?
We will use President Obama’s recently published “A New Economic Patriotism” as a general outline (Re. http://i2.cdn.turner.com/cnn/2012/images/10/23/jobs.plan.booklet.pdf, Page 4 “Energy Made in America”).
1a. U.S. Domestic Oil Production is Up and Imports are Down
Obama – Fact: Domestic crude oil production is up by 25% and net imports are down 30% since 2008, and the number of U.S. oil & gas rigs is at recent historic highs. The current Administration can reasonably be credited with about 2% of recent reduced oil imports (Re. “Why Have U.S. Imports Declined in Recent Years?” http://theenergycollective.com/jemillerep/114236/why-have-us-oil-imports-declined-recent-years). The vast majority of increased crude oil production and reduced imports is due to oil development that began during the previous Administration. Recent oil production increases are due to ramping up of maturing development projects (it normally takes 3-5 years to put new oil into full production) and new oil development has been largely on State and Private lands. New oil permits issued on Federal land/waters since 2009 will only begin significantly contributing to total U.S. production possibly within the next couple years.
The current Administration’s announced opening of millions of acres of additional Federal lands/water to new production has yet to actually develop. Drilling in places such as the Alaskan National Petroleum Reserve and Arctic National Wildlife Reserve have faced chronic delays and the number of new permits in the Gulf of Mexico is down significantly from the previous Administrations. A significant number of Gulf oil rigs have been recently idled and owners are now moving increasing numbers of these oil rigs to other countries. Unfortunately as the current Administration continues to apparently stall Gulf permits, China has partnered with Cuba and has begun drilling operations near the Florida Straits.
Any possible recent changes to this part of the Obama “all-of-the-above” energy plan appear relatively insignificant.
Romney – No changes appear to be made to his energy plan which calls for actually opening up additional Federal lands/waters to the new production needed to help the U.S. economy recover.
1b. U.S. Natural Gas Production
Obama – Fact: Domestic natural gas production is up by about 20% since 2008. Nearly all of this increased production has come from State and Private lands, and is largely due to hydraulic fracturing and recovery of shale gas.
Despite the current Administration’s claims to support cleaner burning natural gas, permitting and production on Federal lands remains stalled and the EPA has been diligently trying to intervene into the State’s authority to regulate natural gas development and production (Re. “Fracking & Groundwater Contamination: Are EPA Tests 'Shoddy Science'?”, http://theenergycollective.com/jimpierobon/134221/epa-s-tests-groundwater-near-wy-natural-gas-drilling-sites-shoddy-science-or-caus).
Possible changes to this part of the Obama “all-of-the-above” energy plan appear insignificant. The claim of creating 600,000 natural gas jobs is not reasonable since these jobs were created overwhelmingly by the Free Market on State and Private lands.
Romney – No changes appear to be made to his energy plan, which calls for actively supporting shale gas development and opening up addition Federal lands.
2a. Clean Coal
Obama – Fact: Domestic coal consumption has declined by almost 25% since 2008. This reduction in coal consumption has been due to a combination of ‘fuel switching’ to cheaper natural gas and the newly issued EPA regulations. Although the current Administration has provided up to $5 Billion in clean coal technology development such as carbon capture & sequestering (CC&S), generally only demonstration facilities have been built. Future costs of coal power with CC&S are much higher than alternative lower carbon natural gas and zero carbon nuclear power.
The impact of new EPA coal power plant emission reduction requirements (Re. “Fact Sheet Mercury and Air Toxics Standards for Power Plants”, http://www.epa.gov/mats/pdfs/20111221MATSsummaryfs.pdf) not only will prematurely shutdown existing coal power plants, but also will become a major barrier to future new construction. Another concern with these new EPA coal power regulations is that current power grids’ reliabilities could also be put a risk to increased brown- and black-outs (Re. “Potential Impacts of Future Environmental Regulations”, http://www.nerc.com/files/EPA%20Section.pdf). The EPA has removed potential power grid reliability concerns and considerations during their recent rules-making process.
Possible and likely very significant changes to this part of the Obama “all-of-the-above” energy plan appear to be deferred until after the election. What has not been covered in the latest Obama energy plan is the EPA’s undeclared war on coal. Despite the general reference to supporting (more expensive) ‘clean coal’, the EPA is actively developing many additional new regulations that will make future coal development and its viability much less feasible. Near future EPA regulations include: coal ash restrictions, increasingly strict power plant MACT/NSR (maximum available controls technology /new source reviews that will significantly reduced SOX, NOX, PM, etc.), substantial reduced CO2 emissions, cooling water discharge restrictions, etc.
Romney – No changes appear to be made to his energy plan. Romney supports clean coal (excluding carbon) and plans for better managing future regulations to ensure that the costs and benefits achieve a reasonable balance between the environment, energy costs and the economy impacts. This same approach to better managing future EPA regulatory actions also will help mitigate other possible needless and wasteful impacts on other U.S. sectors (Re. “EPA’s Regulatory Train Wreck”, http://www.alec.org/docs/EPA-TRAIN-WRECK-2011-Final-Full-printres.pdf).
2b. Renewable Power
Obama – Fact: Renewable wind, solar and geothermal power should double 2008-12. These renewable sources accounted for 2% (in 2008) and 4% (projected 2012) of total U.S. electric power generation. This has been due to a combination of power subsidies originating with the previous Administration and the America Recovery and Reinvestment Act (ARRA) 2009 financial support under the current Administration. The current power generation subsidies (2.2 cent/KWH) are scheduled to expire at year’s end.
No change to this part of the Obama “all-of-the-above” energy plan has been indicated. The President still supports extension of the power subsidies beyond the end-of-year, and would continue additional financial support to build on ARRA 2009 if Congress agreed to more (deficit) stimulus spending.
Romney – No changes appear to be made to his energy plan, which does not support further renewable power subsidies without first addressing the huge Federal deficit.
3. New CAFE Standards
Obama – Fact: U.S. CAFE standards were required to increase to 35 mpg in 2020 by the previous Administration’s Energy Independence and Security Act (EISA) 2007. The current Administration further built on the EISA CAFE standard requirement by increasing new average light duty vehicle (LDV) fuel efficiency up to 50 mpg in 2025. The Administration’s claimed benefit of the new 2025 CAFE standards of reducing oil consumption by 2.2 million barrels per day and saving consumers $8,000 are directionally correct, but these benefits will not be realized for another 20 years (Re. “Can the New CAFE Standards Deliver (Promised Benefits)?”, http://theenergycollective.com/jemillerep/104841/can-new-cafe-standards-deliver-promised-benefits). Unfortunately, all the reduced LDV petroleum fuels consumption will be offset by (EIA) projected growth in the population, economy, etc. by 2035, and most the of $8,000 consumer savings (over the vehicles’ 10-12 year life) will be offset by increased new efficient LDV costs.
No change to this part of the Obama energy plan has been stated. Another factor that will unfortunately increase future consumer LDV operating costs is the developing EPA regulation to implement Tier III gasoline standards after the election. This regulation will decrease gasoline maximum sulfur content from 30 to 10 ppm, which is estimated to increase fuel costs by 6-9 cents per gallon ($10 Billion/yr. U.S. total). Possible future cap-and-trade and/or carbon taxes would further increase consumer costs in the near future.
Romney – No changes appear to be made to his energy plan, which does not support CAFE standards over the Free Market decisions. Romney, however, has not stated any plans to change the current Administration’s new CAFE standards.
4. Clean Energy Manufacture
Obama – Fact: The current Administration has supported clean energy development and manufacture by investing $10’s Billion in R&D, loan guarantees, tax credits and other subsidies from the ARRA 2009. The Administration proposes continued stimulus spending (tax credits, etc.) to support high-tech batteries and other clean energy manufacturing. This effectively builds on the ARRA 2009 support which expires. These continued subsidies are not a significant change to the Obama energy plan.
Romney – No changes appear to have been made to his energy plan, which recommends shifting Government support of clean energy to primarily R&D and not directly supporting the construction and operation of manufacturing facilities (ending loans guarantees, capital tax credits, etc.). This strategy avoids current Federal Agencies’ inability to properly evaluate which clean energy technologies can be successfully commercialized such as growing the Solyndra scandal (Re. “Solyndra’s Second Chapter”, http://theenergycollective.com/geoffrey-styles/135476/solyndras-second-chapter).
5. Renewable Power Standard
Obama – Fact: Both candidates have been criticized for not addressing climate change. The Senate failed to take up the House “American Clean Energy and Security Act” 2009 climate change bill, which was a version of the current Administration’s attempt at cap-and-trade to possibly control climate change. Senator Bingaman initiated a new bill “Clean Energy Standard Act of 2012” (BCES) that would mandate that 80% of U.S. power come from renewable, clean sources by 2035. Obama has recently added this climate bill scope to his energy plan.
Obama claims the BCES Act will help U.S. manufacturing (create jobs), and improve access to ‘cheaper’ and more ‘secure’ energy (electric power). The problem with this claim is that clean power is more expensive than the current power mix (Re. “How Can the U.S. Substantially Reduce Carbon Emissions? “, http://theenergycollective.com/jemillerep/133431/how-can-us-substantially-reduce-carbon-emissions). And, since only a very small amount of U.S. electric power is imported from Canada, the concept of energy security is not relevant in this case.
Review of the EIA analysis of the BCES (Re. http://www.eia.gov/analysis/requests/ces_bingaman/) finds that the Power sector coal is projected to be reduced by 44% (-789 million MT/yr. CO2) and natural gas increases by 227% (+514 million MT/yr. CO2) by 2035. Renewable power is increased from 4% to 21% of total U.S. power generation in 2035. This results in only a 5% reduction in total U.S. CO2 emissions 2011-2035.
Romney – No changes appear to be made to his energy plan, which puts priority on helping the economy more fully recover and actual jobs creation. Romney has not address climate change since this issue has yet to be fully addressed by both Congress houses.
Tangible Changes to the Obama and Romney Energy Plans
Overall very few changes appear to have been made to either candidate’s energy plans recently. The largest change appears to be President Obama’s renewed, but relatively small focus on climate change and reducing U.S. carbon emissions.
It’s time for voters to make a choice for the next President. Do you choose the current Administration’s energy plan of significant doublespeak in support of fossil fuels, and clearly higher priority on Government mandated and (added deficit spending) support for renewable energy development? Or, do you choose a new Administration whose plan is empowering the Free Markets to develop the most economic, environmentally responsible, and secure energy sources to help facilitate a more rapid U.S. economy recovery and better position average consumers to afford higher cost renewable energy? Addressing the next priorities such as climate change should be done by a truly bipartisan process between all parties in Congress and led by a President with the greatest demonstrated ability to work with both parties on issues critical to the future of our country.
Image: Election 2012 via Shutterstock
Energy Consultant and Professional Engineer. 35 years experience in petroleum & clean energy businesses. Education: Chemical Engineering/Chemistry degrees from U.C. Davis and MBA from Saint Mary's College/U.C. Berkeley. Lifetime student of the natural sciences. Experienced in refining design/operations/maintenance, economics & project development/management, business development, energy ...
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