Romney: North American energy independence by 2020

Romney’s ‘new’ plan used to be a Canadian priority—but no longer

by Luiza Ch. Savage

Evan Vucci/CP Photo

On the road today in Colorado where Mitt Romney is trying to turn the page form his fraught foreign trip with a laser focus on the economy.

His aides say he will announce a 5-point “Plan for a Stronger Middle Class.” From the sounds of it, the plan is a repackaging of the same economic policies Romney has already outlined in his campaign — cuts to income taxes and corporate taxes, deregulation, and reducing government spending to 20% of GDP.

Interestingly, the first plank of the “new” plan is a goal of achieving “North American energy independence by 2020.” It’s not an easy goal — that in practice would likely require both increases in production and reductions in energy consumption (and expensive investments in new technologies).

The Romney campaign said it would be done through increased domestic US production and building more infrastructure (including Keystone XL) within North America.

North American energy independence was for a long time the notion that Canadian representatives would pitch in Washington.

That changed with Stephen Harper’s comments on the subject during his April visit to Washington when he said continental independence was not in Canada’s interests any longer:

I’ve got to say that Canada’s interests  here are a little bit different, and particularly—I might as well be frank with you—in light of the interim decision on Keystone.  What it really has highlighted for Canada is that our issue when it comes to energy and energy security is not North American self-sufficiency; our energy issue is a necessity of diversifying our energy export markets.

We cannot be, as a country, in a situation where really our one and, in many cases, almost only energy partner could say no to our energy products. We just cannot be in that kind of position.

And the truth of the matter is that when it comes to oil in particular, we do face a significant discount in the marketplace because of the fact that we’re a captive supplier.

So we have made it  clear to the people of Canada one of our national priorities is to make sure that we have the infrastructure and the capacity to export our energy products outside of North America. Now, look, we’re still going to be a major supplier to the United  States. It’ll be a long time, if ever, before the United States isn’t our number one export market. But for us, the United States cannot be our only export market. That is not in our interests either commercially or even, as I say, in terms of price.

 

 




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Romney: North American energy independence by 2020

  1. Romney’s message is fairly irrelevant — it will remain to be revealed after the election what his Republican masters have planned for US citizens. One thing is clear — to achieve tax cuts AND lower deficits major cuts to Medicare and social security will have to occur.

    • Who are these shadowy “Republican masters” of whom you speak? Why the conspiracy?

      • Koch brothers etc.

      • Well, at least we now have an explanation for most of your posts.

  2. “From the sounds of it, the plan is a repackaging of the same economic
    policies Romney has already outlined in his campaign — cuts to income
    taxes and corporate taxes, deregulation, and reducing government
    spending…”

    It sounds like (yet another) repackaging of the policies initiated by Reagan. How did the middle class fare under these policies?

    “In 1988, the income of an average American taxpayer was $33,400,
    adjusted for inflation. Fast forward 20 years, and not much had changed:
    The average income was still just $33,000 in 2008, according to IRS
    data.”

    http://money.cnn.com/2011/02/16/news/economy/middle_class/index.htm

    • Still waiting, and waiting and waiting for the old trickle down.

  3. Doesn’t energy independence mean North Americans have enough oil here that we can stop buying oil from mad mullahs in Middle East? It makes an awful lot of sense to keep North American $$$ in NA instead of giving our money to people who despise our cultures and countries. North America can still be energy independent even if Canada starts selling oil to other countries because we have way more oil than we need.

    • Canada may have way more oil than Canada needs, but are you suggesting that Canada has way more oil the NORTH AMERICA needs??? ‘Cause I think the U.S. uses a lot of oil.

      • I work for american consultant firm that does auto sector work and the people in car industry are talking about this potential change in where oil is located. Shale oil going to drastically change world if there is as much as they estimate there is.

        Walter Russell Mead ~ Energy Revolution:

        Forget peak oil; forget the Middle East. The energy revolution of the 21st century isn’t about solar energy or wind power and the “scramble for oil” isn’t going to drive global politics. The energy abundance that helped propel the United States to global leadership in the 19th and 2oth centuries is back; if the energy revolution now taking shape lives up to its full potential, we are headed into a new century in which the location of the world’s energy resources and the structure of the world’s energy trade support American affluence at home and power abroad.

        By some estimates, the United States has more oil than Saudi Arabia, Iraq and Iran combined, and Canada may have even more than the United States. A GAO report released last May (pdf link can be found here) estimates that up to the equivalent of 3 trillion barrels of shale oil may lie in just one of the major potential US energy production sites. If half of this oil is recoverable, US reserves in this one deposit are roughly equal to the known reserves of the rest of the world combined.

        Edward Luce, an FT writer usually more given to tracing America’s decline than to promoting its prospects, cites estimates that as early as 2020 the US may be producing more oil than Saudi Arabia.

        http://blogs.the-american-interest.com/wrm/2012/07/15/energy-revolution-2-a-post-post-american-post/

        • Interesting article. First problem that comes to my mind though is that, like shale gas, the process of extracting this oil is an environmental disaster. Yeah, the oil may be there, but if the extraction leaves the region uninhabitable through additives to the water table that kill crops and people, it might as well not be.

          We need some strict oversight and regulation in this area to prompt the oil firms into developing better technologies to extract this stuff.

  4. Good ole ‘Mitt-for-brains’ again.

    • I’m guessing this is the kind of “advice” you give “clients” at your day job as “an economist”? LOL

      • My advice to everyone is ‘don’t feed the trolls’…..so Ciao, Ricky

        • So I’ll take that as a yes. As someone who has repeatedly claimed to be “an economist”, I’d expect a slightly more nuanced, factual, and frankly less childish comment.

          But sure, call me the troll. Good ol’ EmilyOne dumbing the conversation down to her comprehension level.

          So I’m just going to assume you’re as much of an “economist” as Al Gore is a “climatologist”. Thanks for clarifying, Troll.

          • ZZZZZZZzzzzzzzzzzzz

          • He only has one trick. Reminds me of someone…

          • LOL yeah, me too

  5. Energy independence is a matter of national security for the US. The American economy and even day-to-day life would grind to a halt in short order if the major non-Canadian suppliers, many of whom are already not entirely friendly to US ideals, were to decide to cut supplies. The OPEC crisis of the 70′s will seem like small potatoes by comparison.

    In order to achieve energy independence from said suppliers, the US needs to ramp up domestic production and strengthen energy ties with Canada. Therefore, it was rank folly (from a national interest point of view) for Obama to block Keystone XL. He did it to improve his fundraising prospects with the environmental lobby in this election year, and for Obama that takes precedence over the national interest of the country he is sworn to protect.

    Romney is exactly right to insist that this course be reversed, but he may be too late. Four years of Obama has done enough damage to US-Canadian relations that Canada will now likely pursue export markets, despite additional infrastructure cost, regardless of how Keystone XL plays out. Because to Canada it’s become clear that although a stronger US-Canada energy relationship makes sense objectively for both countries, objective reasoning will not rule the day when an egocentric opportunist wins the Presidency.

    • The US is exporting oil.

      And the pipeline was only going to transit the US, and be exported as well

    • Surprisingly (j/k) Emily makes a good point.

      An awful lot of the oil that will be flowing through Keystone XL is destined for refineries in Texas, and then off for sale on the export market. Keystone doesn’t necessarily help as much with “North American energy independence” as the rhetoric would have one believe unless they significantly cut down on the amount of oil scheduled to flow through the pipe on it’s way out of the U.S.

      • Not so. Where do you expect the product to go….the Strategic Reserve?

        For the US, what matters isn’t where the oil goes but where it comes from. In the event of a crisis a la OPEC 1973, the US can halt exports of oil and use them to offset internal shortfalls within North America. This doesn’t work when the crude is coming from the Middle East, China, or Russia.

        So the point remains: it’s in the US’s (and our) best interest to have sufficient supply that an external hostile power can’t cripple the US at will. Keystone XL is part of that solution. However for Obama, US national security runs a distant second to getting more bundlers for his reelection campaign. For the US this is obviously bad, but they voted the guy in so I have little sympathy for them. For Canada it’s also bad, both for national security and economically, but we can solve the latter by expanding our customer base, which is going to involve a lot of setup costs, but will prevent us from being held hostage to the whims of whatever egomaniac the US sees fit to elect.

        And that is the problem for Romney – he can reverse Obama’s disastrous policies, but the damage they’ve done is less easy to repair.

        • In the event of a crisis a la OPEC 1973, the US can halt exports of oil and use them to offset internal shortfalls within North America.

          OK, good point. I hadn’t thought of that.

          That said, if the U.S. imports 11.3 million barrels a day from the rest of the world, and Canada exports a total of 2 million barrels of oil a day to the rest of the world, I’m still not sure I understand how any plan can make up that 9.3 million barrel a day difference in just 8 years. If the U.S. isn’t going to cut consumption (and come on, they’re going to cut consumption under a ROMNEY administration???) then the current U.S./Canada combined production would have to go from 12,345,000 barrels a day to 21,345,000 barrels a day to cut our combined reliance on the rest of the world (and none of that counts the 1.2 million barrels of oil that CANADA imports every day).

          I don’t know enough to say definitively that it’s not possible to go from producing 12 million barrels a day to producing 21 million barrels a day in just eight years, but it seems like a stretch.

        • However for Obama, US national security runs a distant second to getting more bundlers for his reelection campaign.

          I knew there was a reason that Obama killed bin laden, kept Gitmo open, and took out more terrorists with drone strikes in three and a half years than George W. Bush did in 8. No, wait…

          • Yes, it is striking how incompetently he’s handled Gitmo, continuing with “shredding the Constitution”, in the words of Obama circa 2008, by keeping it open because he didn’t bother to think through how he would close it ahead of time. That’s called “dividing the country by falsely accusing a sitting President of treason in order to further one’s own political career”. Opportunists do that sort of thing. You’ll notice Bush has never responded to continuing criticism from Obama since Obama took office. That is an example of “being a class act”.

            Obama does what he needs to do to get elected. Whether that’s disqualifying all his opponents using legal loopholes, as in his first run for office, taking “Present” votes that would prove unpopular otherwise, or killing people (including American citizens) without due process after having stridently decried such things, he does it. It also includes reneging on strategic defense agreements with allies who have gone out on a limb (Poland), cynically “evolving” on key social issues when special-interest fundraisers threaten to pull out, and halting an oil-supply agreement with a close and extremely reliable ally despite national security concerns in order to gain support from the environmental lobby.

  6. http://www.indexmundi.com/g/r.aspx?t=0&v=93&l=en

    The U.S. imports 11.3 million barrels of oil a day from the rest of the world.

    Canada exports a little over 2 million barrels of oil a day to the rest of the world (while simultaneously importing another 1.2 million barrels).

    Can someone explain to me how this is going to work?

    Even if every barrel we export from Canada went to the U.S., and stayed there, wouldn’t that still leave the U.S. with a deficit that needed filling of 9.3 million barrels a day?

    The U.S. would have to double their production, or halve their consumption to make up such a deficit, wouldn’t they? Even if you divided that evenly between production increases and consumption decreases, are we suggesting that in less than 8 years the U.S. is capable of increasing it’s domestic production by 50%, and decreasing it’s domestic consumption by 50%?

    Of course there are many combinations of American and Canadian production increases, and consumption decreases that one could discuss, but at these levels it seems to me that even combining the two, any production increase you’d need would be of an order of magnitude that even the most profligate oil company would say “the industry can’t possibly ramp up that much that fast” and any consumption decrease you’d need would be big enough that even Greenpeace would say “That’s just not doable”.

  7. Canada should not rely on our oil sands.
    Oil is to valuable to burn for fuel as it has thousands of uses.
    I predict in the near future Free energy if it is allowed to happen.
    Very powerful oil, gas, coal interests will oppose the change.
    It is all about Money!

  8. This is utterly
    irresponsible.

    First, there is nothing
    original in this proposal.
    Rather than setting down some new, daring approach
    to the USA energy conundrum, Romney is instead embracing a particular, well
    established school of thought on the subject. And this particular school of
    thought appears to hold dear far lower environmental standards than those held
    by the people who set up current USA environmental and energy legislation
    [regulations].

    Second, by attempting to turn
    the energy issue into a side-show of the long standing and ongoing state-federal tensions, Romney
    is catering to anti-federal government sentiments among his now-base (welcome,
    Mr Ryan). He is doing this by adopting non responsible approaches to what are
    in fact far more important issues –that in the future USA there should be an
    environment in which people can actually live in, to begin with, let alone a
    place where they can be proud of their state’s relative autonomy from the
    federal government.

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