The sparring over energy issues in the Presidential debates, particularly the first one at the University of Denver, underscored divergent viewpoints between the two candidates. The differences are particularly important here in Colorado, where we are home to ten of America’s 100 largest natural gas fields, and three of the 100 largest oil fields.
President Obama correctly noted that oil and natural gas production are higher than they’ve been in years, but Governor Romney countered that “all of the increase in natural gas and oil has happened on private land, not on government land.” He took the president to task for cutting the number of permits and licenses in half. In Colorado more than a third of the land is controlled by the federal government, so we found it alarming that the president did not answer to the fact that oil and gas production on federal lands dropped to record low levels.
When the president proposed new taxes on gas and oil that would ultimately be borne by consumers and cost job losses, Romney correctly took him to task for wasting tens of billions of taxpayer dollars on expensive and unreliable energy sources, whose failed corporate leaders were Obama campaign donors.
The debate spelled out clear differences, yet voters still deserve answers to questions that were not asked during the debates.
The Interior Department is expected to issue new regulations on hydraulic fracturing, a process that extracts oil and gas from shale rock deposits. Colorado’s shale oil deposits contain as much as 1 trillion barrels of recoverable oil – nearly as much as the entire world’s proven oil reserves. The federal rule will cost the industry an estimated $1.5 billion dollars while vesting authority to the federal government that had been reserved to the states for more than 60 years without a single instance of groundwater contamination.
Will Obama approve the new rules? Almost certainly since they are being drafted by his Administration. Romney has indicated he prefers leaving regulation to the various states as it has historically been administered.
Federal energy regulations have a direct impact on the lives of the 570 employees who work at Colorado’s two refineries, and earn more than $150,000 a year, on average. Significantly more workers are employed in the large gulf coast refinery regions and elsewhere, but a plethora of new government regulations are threatening their jobs as well as driving energy costs even higher.
For example, under new EPA rules, refiners must buy costly "waiver credits" if they don’t blend gasoline and diesel with a mandated amount of cellulosic biofuel. Yet no cellulosic ethanol even exists outside of a research laboratory.
It is expected that the EPA will move forward with its so-called Tier 3 rule, which would require even steeper cuts to sulfur levels in gasoline. The rule is coming despite the fact that refineries spent nearly $10 billion to reduce sulfur levels by 90 percent just since 2004, and despite the fact that steeper cuts could result in a 9 to 25 cents per gallon increase in the cost of manufacturing gasoline and lead to as many as seven additional refinery closures. Tier 3 is an excellent example of why both candidates should have been asked whether or not the costs of regulations should be taken into consideration along with the potential benefit.
The Obama Administration has been criticized for "the most anti-oil-and-gas record in U.S. history." On the other hand, Mitt Romney has made North American Energy Independence by 2020 the number one objective of his 5-point economic plan. Under Obama, permitting, leasing and production on federal lands declined. Romney would streamline regulation restrictions and open more federal reserves both on and off shore to energy development.
Obama has exerted continually more federal control over energy resources. Romney’s plan would return authority to the states for federal lands within their borders as well as reaffirm that states have primacy when it comes to the regulation of production on private land.
Colorado’s future economic health and that of our nation is linked to our ability to safely develop our abundant energy resources. Ultimately, much of that ability depends on White House policies that balance costs with the benefits produced by corresponding regulations. Among the many stark contrasts between Obama and Romney, energy policy is one of the most obvious and significant to every American.