In their first presidential debate last Wednesday, Republican candidate Mitt Romney and President Obama squared off over the Dodd-Frank Wall Street Reform Act, oil and natural gas tax incentives and whether the increase in oil and gas production over the past couple of years was the result of Obama administration policies.
Analysts and pundits immediately called Romney the winner, noting that he "clearly held his own on the big questions." This was Romney's "best debate by far...We've now got a horse race," leading into the November election, said one political observer following the debate at the University of Denver. Some saw the president as being "rusty" since he hasn't had to face a competitor since before the 2008 election.
Obama raised the issue of repealing $4 billion/year in tax breaks to the oil and gas industry. "Now does anybody think that ExxonMobil needs some extra money when they're making money every time you go to the pump?" he asked.
Romney countered that the Obama administration's Department of Energy (DOE) has estimated the tax breaks for oil and gas at $2.8 billion/year, not $4 billion, and that the tax breaks go largely to small operators rather than the majors, such as ExxonMobil, ConocoPhillips, Chevron Corp. and BP plc.
"If we get [the] tax rate from 35% down to 25%, now that $2.8 billion is on the table. Of course it's on the table. That's probably not going to survive if you get that rate down to 25%," he said.
In defense of the federal tax breaks for oil and gas, Romney pointed out that the Obama administration in one year pumped $90 billion into wind and solar projects by green companies, many of which he alleged have gone out of business. "Now I like green energy as well, but that's about 50 years worth of what oil and gas receives."
According to the CNN fact-checker, the DOE 2009 stimulus authorized $90 billion for green energy projects. However, most of the large projects that benefited from the DOE loan program remain in operation, contrary to Romney's assertion that "almost half" of them had closed.
Both Romney and Obama agreed that domestic oil and gas production did indeed rise in the past couple of years. Obama credited the gains to his administration; Romney did not. "The production of oil and gas in the U.S. is up but not due to his policies, [rather] in spite of his policies," said Romney. "Mr. President, all of the increase in natural gas and oil has happened on private land.
"On government land, your administration has cut the number of permits and licenses in half. If I'm president, I'll double them and also get the oil from offshore and Alaska and bring that pipeline from Canada [TransCanada Keystone pipeline]. And by the way, I like coal. I'm going to make sure that we can continue to burn clean coal," Romney said.
Romney attacked parts of Dodd-Frank, while at the same time defending the need for regulation of Wall Street. "We have to have regulation of Wall Street...But I wouldn't designate five banks as too big to fail and give them a blank check. That's one of the unintended consequences of Dodd-Frank. It wasn't thought through properly. We need to get rid of that provision because it's killing...small banks," he said during the debate.
However, "some parts of Dodd-Frank...make all the sense in the world," he said, such as the need for transparency in the derivative markets. Neither Romney nor Obama addressed the provisions of Dodd-Frank that pertain to energy regulation. Romney also called for a downsizing of the federal government by combining departments and agencies, but he did not specify which ones.
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