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Can Romney's Plan Achieve Energy Independence?

Oct 16, 2012

Mitt Romney has proposed a national energy plan that he claims will enable the U.S. to end its reliance on foreign energy sources by 2020, but experts are divided on its effectiveness.

In August, Republican presidential candidate Mitt Romney announced a new goal for his administration: achieving energy independence for the United States within the next decade.

"This is not some pie-in-the-sky kind of thing," Romney said at a New Mexico campaign event. "This is a real, achievable objective."

Energy independence has long been a goal, as experts agree that reliance on foreign oil and other energy sources is untenable in the long term and is a threat to national security. According to the U.S. Energy Information Administration, in 2011 the U.S. consumed 18.8 million barrels per day (MMbd) of petroleum products. Of this, the country imported 11.4 MMbd of crude oil and refined petroleum, while it produced only 5.7 MMbd of crude oil and 4.6 MMbd of other petroleum supplies. Over the same period, the U.S. exported 2.9 MMbd of petroleum gasoline, diesel fuel, heating fuel and other products, while importing 2.4 MMbd, a net export difference of 0.5 MMbd.

Canada and Saudi Arabia account for the majority of energy imports to the U.S., representing 29 percent and 14 percent of total imports, respectively. The next three biggest importers are Venezuela (11 percent), Nigeria (10 percent) and Mexico (8 percent). When grouped, Persian Gulf countries, including Bahrain, Iraq, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates, accounted for 22 percent of crude oil and petroleum product imports.

"America's dependence on imported energy increases its strategic vulnerability and constrains its ability to pursue foreign policy and national security objectives," the Council on Foreign Relations (CFR) explains. Oil-rich nations such as Russia, Iran and Venezuela are able to "ignore U.S. policies and to pursue interests inimical to our national security" because of U.S. dependence on their energy supplies, the CFR warns.

Mitt Romney claims his plan will result in a significant increase in domestic U.S. energy production that will exceed the country's consumption requirements, making it a net producer of energy.

"The net-net of all this, as you can see, is by 2020, we're able to produce somewhere between 23 million and 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 where we don't want to," Romney said.

The plan relies on simultaneous development of multiple new sources. According to CNN Money, the key energy independence measures are:

  • Granting states control of drilling on federal lands in their borders;
  • Granting states oversight for onshore energy developments;
  • Increasing offshore drilling sites, such as those off the Virginia and Carolina coasts;
  • Approving the Keystone XL Pipeline;
  • Setting minimum oil production targets in the government's leasing plans;
  • Reducing new energy project paperwork and waiting times by creating a fast-track approval process; and
  • Limiting third-party litigation rights to prevent environmental groups from delaying new sources through lawsuits.

Additionally, the Romney plan calls for biofuel subsidies and loosening environmental restrictions on coal and other energy production. The increase in domestic production "can add 3 million jobs," Romney argued. Other benefits include gross domestic product (GDP) gains of as much as $400 billion a year, lower energy prices and growth of America's manufacturing sector.

However, experts disagree about the plan's effectiveness.

The CFR described the plan's as myopic because crude oil prices are set by global markets. "U.S. economic vulnerability to volatile oil markets stems from the volume of oil we consume, not the volume we import," Michael Levi, an energy and climate fellow at the Council on Foreign Relations, told Reuters. "If you don't change the volume of oil we consume, you've missed most of the problem."

Meanwhile, Forbes claims that while Romney's vision is "bold," the numbers seem overly optimistic.  For instance, research firm WoodMackenzie found that development of unconventional oil in the U.S. could grow production from "1.5 million bpd [barrels per day] to 4.1 million bpd by 2020," but the U.S. currently imports 9 million bpd. To cover the deficit "drillers would have to find and develop another 5 million barrels per day of domestic oil, while continuing to fight declining production from older fields. This will not happen by 2020, and probably not ever."

However, other voices have declared their support for the Romney plan.  "For U.S. manufacturers to be able to compete successfully in the world marketplace, they need access to a consistent supply of affordable energy," Jay Timmons, president and CEO of the National Association of Manufacturers (NAM), said. "To achieve that, a true 'all-of-the-above' approach is necessary."