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McCain Favors 'Drill Here Drill Now;' Obama More Tepid

With the clock ticking down to election day, Alaska Gov. Sarah Palin last week tried to capture the vote of producers and other proponents of onshore and offshore drilling, saying that a McCain administration would support a policy of "drill here and drill now."

Democratic presidential candidate Sen. Barack Obama of Illinois has said he would support limited expansion of oil and natural gas drilling on the Outer Continental Shelf (OCS). But the head of Frost & Sullivan's North American energy practice last Wednesday said she couldn't rule out the possibility that Obama may reinstate presidential restrictions on drilling if elected Tuesday.

"In a McCain administration, we will authorize and support new exploration and production of America's own oil and gas reserves because we cannot outsource the solution in America's energy problem," Palin said during an energy address in Toledo, OH, last Wednesday.

"Every year we are sending hundreds of billions of dollars out of the county for oil imports, much of it from OPEC [the Organization of Petroleum Exporting Countries], while America's own oil and gas reserves...go unused," Palin, the running mate of Republican presidential contender Sen. John McCain {R-AZ), told the crowd.

Obama seems to be "much less enthusiastic" about OCS drilling than McCain, said Roberta Gamble, director of the North American Energy and Power Systems Practice for the global consulting firm of Frost & Sullivan. McCain believes that the OCS should remain unrestricted and that individual coastal states should decide on whether to allow drilling off their shores. Producers are waiting on the sidelines to see if a new president and new Congress will reinstate partially or fully the bans that ended recently.

In July President Bush lifted the presidential ban that placed the East and West Coasts and parts of the eastern Gulf of Mexico off limits to leasing and drilling activity (see NGI, July 21). And the congressional moratorium on leasing in those areas expired on Sept. 30, leaving the OCS free of restrictions for the first time in decades (see NGI, Oct. 6).

Obama "[has] said he wouldn't [reimpose the restrictions], or at least he some expansion of offshore drilling. Now when he's actually in office is that going to happen or not? I'm a little doubtful that there would be any expanding in offshore drilling," Gamble said.

"It's possible I think that some more moratoriums could be placed on it. I guess it depends [on] what political pressure he's under. But right now he's stated he's for limited expansion" of offshore exploration and production, she said.

Obama adviser Elgie Holstein last month said Obama would be looking for a comprehensive, bipartisan approach on energy measures, encompassing development and drilling for conventional resources as well as energy efficiency, renewables and mitigating energy costs (see NGI, Oct. 20). "Discussions need to continue on a bipartisan basis for a comprehensive approach that includes not just the best approach to developing our offshore resources, but what are we going to do with regard to efficiency, renewables and assistance to Americans and small businesses in meeting the challenges of their high energy bills."

In addition to greater OCS development, Palin said the construction of an Alaskan natural gas pipeline from the North Slope to the Lower 48 states "will lead America one step farther away from reliance on foreign energy. That pipeline will be a lifeline -- freeing us from debt, dependence and the influence of foreign powers that do not have our interests at heart."

She said big producers, such as ExxonMobil, were "one of the main obstacles" to the pipeline being built over the past three decades. "They should have been competing to invest in a new means of delivering their product to market. Instead they wanted a higher price than fair competition would yield. They were holding out for more billions of dollars -- in public money. No one in good conscience could pay them what they wanted to build the pipeline. And that's how we found things when I became governor."

So "we introduced the Big Oil companies and their lobbyists to a concept some of them had forgotten -- free-market competition," Palin said, adding that progress has been finally been made on what is expected to be a $40 billion pipeline.

Palin called for a "clean break not just from the energy policies of the current administration, but from the 30 years' worth of failed policies in Washington...We must steer far clear of the errors and false assumptions that have marked the energy policies of nearly 20 Congresses and seven presidents." In addition to expanded drilling, McCain advocates the construction of 45 new nuclear reactors by 2030 to power homes, plants and cities, as well as the enhanced development of clean-coal technology.

While "I have seen what American ingenuity can achieve if given a chance," she said that "as governor of a huge energy-producing state, and as chair of our state's oil and gas conservation commission, and chairman of the nation's Interstate Oil and Gas Compact Commission, I've also seen how political pressures, special interests and corporate abuses can work against the clear public interest in expanding our domestic energy supplies."

Palin warned that energy would suffer under a Democratic administration and Democratic Congress. "When you look over the energy plans of Barack Obama and his allies in Congress, it's just a long, labored agenda of inaction. And it's the same agenda of inaction we could expect under the one-party rule of Obama, [House Speaker Nancy] Pelosi and [Senate Majority Leader Harry] Reid. They're always talking about things we can't do in America, energy we can't produce, refineries we can't build, plants we can't approve, coal we cannot use, [and] technologies we cannot master."

In its review of the candidates' energy strategies, San Antonio, TX-based Frost & Sullivan said McCain's plan "in fully leveraging domestic capabilities and resources would likely decrease energy costs and increase security concerns at least in the short-to-medium term. It is uncertain how much of McCain's proposed environmental regulations would be government- vs. market-driven." It questioned whether McCain's proposed 60% reduction in carbon emissions would be enough to mitigate further environmental damage.

"Obama's plans for more aggressive carbon legislation and greater emphasis on renewable power [are] likely to create a more long-term solution for both electricity concerns and environmental issues." However, "in the short term, this may be a more expensive proposition, which may delay or even reduce the ability to enact this longer-term vision," Frost & Sullivan said. It questioned whether Obama's proposed 80% reduction in carbon emissions was more than what's needed (and more costly) to stabilize the environment.

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