The Romney campaign will pursue an energy policy that will lead to North America becoming self-sufficient in energy use by 2020. This will be accomplished through less regulation, opening up additional offshore areas for oil and gas exploration and development and by partnering with both Canada and Mexico.
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Romney's energy policy was contained in a white paper entitled "For A Stronger Middle Class: Energy Independence," and was released last week just in time for the Republican National Convention scheduled to begin this week in Florida. The plan calls for a dramatic increase in domestic energy production assisted in part by turning over the regulation of energy development on Federal lands to the states. Romney expects this to streamline the permitting process, which typically takes much more time at the Federal level.
Romney is also planning to open up various offshore areas for oil and gas development beginning with Virginia, North Carolina and South Carolina. The white paper accuses the Obama Administration with reducing permitting on the few areas of the Outer Continental Shelf (OCS) that are open by 60%. Another part of the energy policy calls for a partnership with Canada and Mexico to facilitate energy investment across borders. This would include a streamlined approval process for pipelines including the Keystone XL pipeline, parts of which are under construction by TransCanada (NYSE:TRP).
Operators also started to evacuate oil and gas platforms in the Gulf of Mexico as then Tropical Storm Isaac advanced towards the United States. The Bureau of Safety and Environmental Enforcement (BSEE) reported that personnel have been evacuated from 346 production platforms and 41 rigs, as of Aug. 27, 2012. These actions will cut oil production by 1.07 million barrels per day and natural gas production by 2.1 billion cubic feet per day. Anadarko Petroleum (NYSE:APC) is one of the largest operators in the Gulf of Mexico and has shut in six producing oil and gas platforms as a result of the storm. BP (NYSE:BP) has evacuated workers from the Thunder Horse platform, which is the world's largest offshore oil and gas platform.
The industry kept up its pace of successful oil and gas discoveries last week with CNOOC Limited (NYSE:CEO) reporting two offshore exploration wells. The company found net oil and gas pay in wells in the Pearl River Mouth Basin and Bohai Bay.
China Oil and Gas
Royal Dutch Shell (NYSE:RDS.A, RDS.B) also plans to invest considerably in China and expects to spend approximately $1 billion per year on the exploration and development of shale gas resources in that country. The company is also trying to build a multi-billion dollar refinery complex in China in partnership with local companies.
The Bottom Line
The Romney campaign is the latest of many candidates to pledge some sort of energy independence or self-sufficiency as part of a political platform. What the country really needs is less white papers and more action by both the legislative and executive branches.
At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.