The start of the Republican national convention in Tampa was delayed at least a day due to Tropical Storm Isaac, churning around the Florida Keys and headed for the Gulf Coast. Tampa was fortunate enough to avoid a direct hit — though the buckets of rain the storm dumped in its path threatened to turn the Florida city into a tropical aquarium. But New Orleans and much of the rest of the Gulf Coast may not be so lucky. Already the effect of the storm is being felt by the oil and gas industry in the Gulf of Mexico itself, where refineries and rigs alike could be at risk from Isaac. The Interior Department estimates that 78% of Gulf oil production has been halted ahead of the storm. As the Gulf is still responsible for almost a quarter of total U.S. oil output, the temporary closure has already pushed gas prices up by more than 2%.
In all likelihood, Isaac will prove only a minor inconvenience to the Republican convention, but the storm and its likely economic effects provide a valuable backdrop for considering the energy policies of soon-to-no-longer-be-just-presumptive GOP Presidential nominee Mitt Romney. In a speech he gave in New Mexico last week — and a white paper the campaign published on August 23 — Romney outlined an energy vision built around two things: domestic oil and domestic natural gas. Romney promised to boost U.S. fossil fuel production by de-emphasizing federal environmental regulations for drilling, and empowering individual states to do as they will with their energy riches. If Alaska or Montana or Virginia wanted to drill for oil and gas within their borders — or along their shoreline — a President Romney wouldn’t let the federal government get in the way.
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Romney claims those changes will help make the U.S. energy independent by 2020, thanks largely to vastly increased domestic oil production, with the only imports coming from North American allies Canada and Mexico. That prediction depends heavily on the shale oil revolution in states like Texas and North Dakota continuing to grow. Along with oil sands crude from Canada — Romney is in favor of the Keystone XL pipeline that President Obama temporarily rejected earlier this year — Romney believes oil production throughout all of North America can more than double from 15 million barrels a day over the next decade. “The net net of all this, as you can see, is by 2020, we’re able to produce somewhere between 28 million barrels per day of oil and we won’t need to buy any oil from the Middle East or Venezuela or anywhere else we don’t want to,” Romney said in New Mexico last week.
Is Romney’s goal realistic? It’s a long shot. The U.S. produced 5.7 million barrels of oil a day in 2011, a number that has been growing in recent years — awkwardly for Romney, since those are the same years President Obama has been in office. But even though a mini-oil boom is underway in the U.S., current domestic production is still well beneath the 10 million barrel a day peak of the late 1960s, simply because so many of the old oil fields in Alaska and the Gulf have been tapped out. Even with greatly increased imports from other North American countries, it would likely take a miracle to get domestic oil production online with what Romney is promising. And while shifting control over oil and gas permitting to the states — a reversal of more than a hundred years of federal law — would likely speed up drilling, it would almost certainly come at an environmental cost. It’s only been a little more than two years since the Gulf of Mexico oil spill — even if it feels a lot longer — and taking regulators off the jobs seems like a good way to ensure a new accident.
But what’s really wrong with Romney’s energy plan is the goal itself. Romney trumpets energy independence as a way to kick-start the economy and reduce costs for the middle class, but as long as the U.S. remains overwhelmingly reliant on oil, the country won’t be independent — wherever that oil comes from. Crude is traded on a global market, and there’s little to no hometown discount. That’s why a supply disruption causes gas prices to go up, whether that disruption is happening in a Mideast exporting nation we can’t stand or in our own backyard in the Gulf of Mexico. Shifting more of our oil imports from Saudi Arabia to Canada might be good for politics, but don’t expect it to do much to relieve the pain at the pump. The Canadians, after all, aren’t interested in cutting us a North American discount. It’s true we’ve been pumping more oil at home over the past few years, but that’s done little to reduce the price of gas, which is now more expensive than it has ever been at this point in the calendar. What was true in 2008 is true now — we can’t “drill, baby, drill” our way to cheap energy.
That isn’t to say that the next President shouldn’t try to increase domestic oil production. More U.S. oil means lower imports, which is good for the economy and good for the trade deficit. But there should be more to energy policy than just drilling. Reducing America’s disproportionately huge demand for oil — the U.S. holds less than 3% of the world’s crude reserves but consumes more than 20% of the global supply— is at least as important as increasing supply. President Obama can claim that he’s tried to moderate demand, pushing through significant increases in U.S. fuel economy standards. Romney, though, opposes those fuel efficiency standards, just as he opposes increased aid for solar, wind and other alternatives — with the Iowa-friendly, politically expedient exception of biofuels — that might help the U.S. break its dependency on oil. It’s a blueprint for addiction — not independence.