RIYADH: The ongoing presidential debate in the US is setting the tone of future energy dynamics of the world.
Last Tuesday when President Obama and challenger Mitt Romney met for the second face to face debate, sparks began to fly – almost instantly. They sparred over oil production on public lands and the factors behind the rise in gasoline prices during the president’s first term.
Getting rid of its crude reliance on the ‘unstable Middle East’ remains very much an obsession in Washington. Past administrations too have been no exception. In his State of the Union address on January 31, 2006, President Bush had highlighted that America was addicted to oil often originating from unstable parts of the world. Although Shale gas and tight oil was not on the horizon, yet President Bush then set a goal of replacing 75 per cent of the nation’s oil imports by 2025 with ethanol and other energy sources.
And then he repeated the same mantra in 2007 address too: “Let us build on the work we have done and reduce gasoline usage in the United States by 20 per cent in the next ten years — when we do that we will have cut our total imports by the equivalent of three-quarters of all the oil we now import from the Middle East.”
And the next White House Democrat incumbent Obama has been no different, stressing in 2008, “we’ve got to look at neighbors like Canada and Mexico (for oil supplies) that are stable and steady and reliable sources.”
Last Tuesday, Obama took pride in the fact that the US domestic crude production is standing at the highest level in 16 years.
However, Governor Romney while conceding that the US was harvesting more oil from within its own borders was of the clear view that much of the surge in domestic crude production is coming from private lands, not federal tracts under the government’s control.
Romney promised ambitious plans by striving to achieve “North American energy independence by 2020,” largely by expanding offshore drilling, relaxing environmental regulations and putting states in control of permitting energy projects on federal land within their borders.
Romney also pledged to approve the Keystone XL pipeline that would deliver Canadian oil sands crude from Alberta to refineries along the Gulf Coast. Administration officials say they were set to make a decision on the controversial pipeline proposal early next year.
Obama, however, insisted on an “all-of-the-above” approach to energy, combining support for renewable fuels and alternative power with domestic oil and gas production.
“Gov Romney will say he’s got an all-of-the-above plan, but basically his plan is to let the oil companies write the energy policies. So he’s got the oil and gas part, but he doesn’t have the clean energy part.” Obama said.
The issue of gas pricing was another hot potato on the plate. Romney pointed out, “When the president took office, the price of gasoline here in Nassau County was about $1.86 a gallon. Now it’s four bucks a gallon.”
Obama’s reply had logic. “(When we took over), the economy was on the verge of collapse ... we were about to go through the worst recession since the Great Depression as a consequence of some of the same policies that Governor Romney is now promoting. So it’s conceivable that Governor Romney could bring down gas prices, because with his policies we might be back in that same mess.”
Obama also reiterated the emphasis on more efficiency. “That (efficiency) means that in the middle of the next decade, any car you buy, you’re going to end up going twice as far on a gallon of gas.”
Oil markets are changing and changing rapidly. New frontiers are emerging. And all this will have considerable political and economical impact, carrying immense geopolitical connotations too.