Marita Noon @ The Energy Tribune:
President Obama’s energy policies have kept investment and jobs out of America; Romney’s energy plan can bring money and jobs back. Analysts are picking apart Romney’s 21-page energy plan that was introduced in Hobbs, New Mexico on August 23rd. Is energy independence by 2020 possible, or is it, as the Financial Times posited, “an act of hubris?” More important than whether or not his energy play is realistic is the international implications of his “independence” assertion and how he plans to get there.
As the news coverage reminds us, “Every US president since Richard Nixon has set an objective of reducing the country’s reliance on foreign oil, and most of them have failed.”
President Obama’s approach has been to “end the age of oil.” To that end, he has poured billions of dollars into green energy projects—many of which were risky investments that have now failed or are headed for failure. His approach has done nothing to reduce our reliance on foreign oil—though we are importing less due to the bad economy and high prices, and the new oil boom presently centered on North Dakota. To companies looking to invest in any kind of extractive endeavor, his policies have screamed “You can’t!”
Romney’s plan is to open up US resources off the east coast and in Alaska; make it easier to obtain permits for oil and gas production, and other energy projects; transfer control of development from the federal government to state authorities; approve the Keystone XL pipeline; and ensure that environmental regulations do not prevent the use of coal. The Romney plan, shouts “You can!”
How will Romney’s plan invite global investment back to America, while Obama’s approach chased it away? The Gulf of Mexico saga offers a simple example.
Drilling rigs cost millions of dollars a day to operate. Following the Deepwater Horizon accident, the Obama administration put a moratorium on activity in the Gulf. Rigs sat idle; people were laid off; and companies lost billions. Ultimately, many of the rigs left our shores for countries that welcomed them—taking the potential jobs and revenues with them, and adding to the economic damage in the region.
Like the rig owners need to have their assets working, all companies need to have growth. If they cannot work in the US, they are virtually forced to do business in other countries. Those countries often have governments that do not respect the rule of law, making doing business there more risky than similar activities in the US. But, at least theycan do business there. In America, they can’t. Additionally, the cheaper labor and lower taxes made the risk/reward ratio attractive.
However, recent history tells us that the reward may no longer be worth the risk.
Russia
A few days ago, ConocoPhilips announced that it is retreating from its position in Russia by disposing of its 30 percent stake in the NaryanMarNefteGaz joint venture to its partner Lukoil, the Russian oil group, and is now focusing mainly on developed countries and on North America in particular. Last month, a Russian decision against BP “demonstrates the perils faced by foreign investors in Russia.” The Financial Times reports: “the ruling has sent a chill through Moscow’s foreign investment community” and shows “the uncertainties faced by western companies that go into business with powerful local partners.”
Nigeria
Also last month, Shell shed its prolific onshore Nigerian oil assets for $850 million, less than the estimated $1 billion value. Shell is now refocusing its Nigerian efforts offshore, “where rigs are better insulated from oil theft, militancy, and the legal constraints of operating in an area that is vulnerable both environmentally and economically.” Shell’s appetite for Nigerian exploration has been waning for months. In February, Ian Craig, Shell’s director for sub-Saharan Africa, said: “The greatest challenge, however, is the massive organised oil theft business and the criminality and corruption which it fosters. This drives away talent … increases costs, reduces revenues both for investors and the government and results in major environmental impacts.”
Argentina
In April, the Argentinian government under, President Cristina Kirchner“nationalized” Spain’s flagship oil company, Repsol’s YPF unit and caused Repsol’s stock to plummet. The relationship between Repsol’s YPF and Kirchner’s corrupt government has been troubled for at least four years, and the fate is now in the hands of the World Bank’s International Centre for Settlement of Investment Disputes in New York.
South Africa
In South Africa a different verse of the same song is playing out, as apartheid-era type violence plagues mining operations. According to theWall Street Journal, “Investors already have been worried this year by a debate about nationalization of South African mines.” WSJ reports: “Mining accounts for about 9% of South Africa’s gross domestic product. But despite the country’s rich resources, South Africa has failed to ride the global commodity boom due to lack of investment in infrastructure.” Addressing the violence at a platinum mine, owned by London-based Lonmin (one of the world’s largest primary producers of platinum group metals), that claimed 44 lives, Mathews Phosa, the treasurer general of the ruling African National Congress, said: “The incident at Lonmin has had a very negative and a very devastating impact internationally. It has created a lot of uncertainties for investors. We need to assure investors that this will never happen again.”
These are just a few examples of the risks multi-national companies are taking—nationalization, theft, corruption—by doing business in countries with unstable governments.
http://michellemalkin.com/
No wonder the unemployment rate is so high here in the US. Our government owned auto maker is making their cars and hiring their employees over seas. Energy development here in the US under Romney’s plan will bring back a lot of jobs and investors. I do not think Romney is the man who is sending our jobs overseas.
@Randy:
And Obama is claiming that he “single-handedly” saved the American auto industry from total destruction.
I’d say that not only does China object to Obama’s claim, but Ford has something to say about it as well.
Horse hockey.
Last year–2011–U.S. domestic oil production reached the highest level in 10 years. Domestic natural gas production reached the highest level in U.S. history. Last year the United States became a net exporter of refined petroleum products for the first time in 60 years. Last year net imports were cut by 10 percent.
A Little Truth About Energy from The Motley Fool, “the site for the long-term investor.”
@Greg: Energy production was on private lands. The Pipeline that would take light sweet crude from ND and MT to refineries and provide the land owners 30% more in income was denied by Obama. Show me one thing Obama did to increase oil production. Just one. The EPA under his direction tried to place extreme restrictions on drilling sites that was eventually overcome by the courts. The info source here was the energy publication. You are reading propaganda!
@Randy, #4:
The Motley Fool website isn’t a political propaganda outlet. The Energy Information Administration collects, compiles, and makes available data without consideration for anyone’s political or policy agendas. It simply gathers and reports the data.
The facts are what they are. Republicans should be more attentive to them.
@Greg:
And yet, you and the other lib/progs find just the right way to twist and spin those facts to make them fit the narrative you choose, which, by the way, happens to be 180 degrees from the actual truth.
@Greg:
The Motley Fool is an investment commentary website. They have a variety of contributors who provide their “opinions.” As with any opinion, a particular article may may or may not have political leanings, industry connections that may color their opinion, and possible misleading or incomplete “facts.” The writer of the article you linked is not even part of Motley Fool’s staff, but only a “contributing writer“. The author does not appear to have anything in his background to indicate that his “facts” are unquestionably “true”. (There are in the comments quite a few people who disagree with his claims.)
Just because you can find a day trader’s article on an investment website, that supports your political agenda, doesn’t mean that everything he wrote is factual.
@Ditto, #7:
Every statement in post #3 is true.
The intensely negative republican spin concerning Obama’s energy policy simply isn’t compatible with those easily verifiable facts.
As with the economy in general, the national energy situation has not deteriorated since Obama took office. Both the economy in general and the national energy situation have markedly improved.
All I can say in return is you, and Obama, “did not build that”….. That distinctive record belongs to prior Congressional sessions and previous administration. Bummer, eh?
Actually could have been even better had Obama not quashed drilling permits and placed moratoriums on both deep and shallow water GOM production. ooops…
Sort of a “lipstick on a pig” moment, don’t you think? :0)
@Greg: Obama reduced the energy development on federal land that generates revenue for the country by making most off limits. If you look closely, nearly all of the energy development was in private held lands and Obama had nothing to do with it! He had directed the EPA to place more restrictions on even the private land energy development, but the courts prevented someof the additional regulations. Actually, most of our Alaska oilis exported and we buy oil from another source since the West coast doesn’t have the refineries. We have been exporting oil since the 1970s.
It primarily generates revenue for the private corporations with a long history of buying access to publicly-owned resources at bargain basement prices, and then leaving an environmental mess for the public to clean up after they’ve maximized their profits. Some of the rules have now changed. The government is doing one of its primary jobs, which is to look out for public and national interests. Apologies to the Koch brothers. Sorry about any inconvenience.
Hey, it hasn’t hurt energy production levels, has it? Production levels have markedly increased. As I understand it, private energy sector profits haven’t been too shabby, either. They’ve been doing just fine since Obama took office. Unfortunately, no amount of money is ever enough when money is your one true god, selfishness has become a virtue, and greed is your driving principle.
@Greg: And you failed to mention that America’s imports of oil reached record highs as well. Must have been an oversight like taking God and Jerusalem out of the DNC platform that 0-blama approved prior to the convention eh??
@Greg: Like the FACT that the Democrat Platform took God and Jerusalem out of their platform and 0-blama approved it prior to the convention??