Candidates and energy

Jan. 14, 2008
As candidate selection began in the US presidential campaign, two inaugural events yielded different winners for each of the two main political parties.

As candidate selection began in the US presidential campaign, two inaugural events yielded different winners for each of the two main political parties. Victors of the Iowa caucuses and New Hampshire primary elections can be called front-runners in their parties’ races for nomination—but not to the exclusion of candidates concentrating their efforts elsewhere. At this point, no one can know who will lead his or her party’s ticket in November.

For the oil and gas industry, however, it’s not too soon to take note of how the early winners approach energy. While campaign positions often differ from those presidents adopt once in office, clear patterns are emerging.

Similar platforms

The Democrats offer similar energy platforms. Sens. Hillary Clinton of New York and Barack Obama of Illinois both would commit the federal government to spending $150 billion over 10 years on energy, reducing emissions of greenhouse gases, and expanding mandates for fuel ethanol.

Clinton, who won in New Hampshire, would start the energy-spending spree with $50 billion funded partly by new taxes on oil and gas companies. According to her campaign web site, she would require that 25% of US electricity come from renewable energy by 2025 and that 60 billion gal of “home-grown biofuels” be available for vehicle use by 2030. The energy bill enacted in December increases the mandate for renewable vehicle fuel to 36 billion gal in 2022.

Clinton also would increase vehicle fuel efficiency standards to 55 mpg by 2030 from the target set by the new energy bill of 35 mpg by 2020. The New York senator proposes a cap-and-trade system targeting reductions in carbon emissions from 1990 levels of 80% by 2050. She hopes to cut oil imports by 10 million b/d from projected 2030 levels.

Obama, the Iowa winner, doesn’t mention tax hikes on oil and gas as a funding source for the $150 billion “investment” he proposes in biofuels, plug-in hybrid vehicles, renewable energy, low-emission coal plants, and a digital electricity grid. His web site says he would create a venture capital fund to invest, in partnership with other investment funds and national laboratories, $10 billion/year for 5 years in “clean technologies.” He would impose renewable-source mandates for power generation and vehicle fuel equal to those proposed by Clinton. Requiring “fuels suppliers to reduce the carbon their fuel emits by 10% by 2020,” Obama also would double vehicle fuel economy standards from an unspecified base within 18 years. He would seek the same oil-import cuts as Clinton.

Former Arkansas Gov. Mike Huckabee, the Republican winner in Iowa, emphasizes energy independence, calling submission of a “comprehensive plan” to Congress “the first thing I will do as president.” But the energy platform on his campaign web site contains more rhetoric than specific proposals. “We have to explore, we have to conserve, and we have to pursue all avenues of alternative energy: nuclear, wind, solar, hydrogen, clean coal, biodiesel, and biomass,” it says. The web site mentions a federal research and development budget to be “matched by the private sector” for alternative fuels, among which, it adds, markets would determine what makes economic sense.

‘Common sense’

From Sen. John McCain of Arizona, the Republican winner in New Hampshire, energy so far has received little attention except in relation to climate change, to which he advocates strong response. According to his web site, McCain “has offered common sense approaches to limit carbon emissions by harnessing market forces that will bring advanced technologies, such as nuclear energy, to the market faster, reduce our dependence on foreign supplies of energy, and see to it that America leads the way that ensures all nations do their rightful share.” McCain opposed the Energy Policy Act of 2005 in part because of the ethanol mandate it imposed but now says ethanol makes sense because oil prices have risen.

On one important issue, only one of these four candidates shows sensible concern for energy supply. Huckabee alone supports leasing of the Arctic National Wildlife Refuge coastal plain. All three senators have voted to ban drilling there.