In his pursuit of the presidency, Mitt Romney has a variety of obstacles to overcome, most notably his own RomneyCare established in Massachusetts being a big government forerunner to ObamaCare at the national level. But on energy policy, Mr. Romney has struck the right tone in his economic plan, for the most part.
On the day he released his agenda, Romney had an op-ed summing things up in USA Today. On energy policy, Romney wrote: "The Obama administration has severely restricted domestic energy production. I will ensure we utilize to the fullest extent our nation's nuclear know-how and immense reserves in oil, gas and coal. By rationalizing and streamlining regulation, we will harness these resources everywhere it can be done safely, taking into account local concerns. A huge number of jobs are at stake. So, too, is the price of energy, which strongly influences economic growth. We are an energy-rich country that, thanks to environmental extremism, has chosen to live like an energy-poor country. That has to end."
Sounds good. What does his energy plan offer specifically? He offers a nine-point agenda:
First, Romney wants to streamline the regulatory process: "Toward that end, all permits and approvals for exploration and development should be issued according to fixed timelines with the availability of fast-track processes. Procedures for issuing permits should be consolidated so that businesses have a one-stop shop for approval of common activities." That, of course, would be a welcome change from the Obama delays and moratoria.
Second, Romney proposes to overhaul outdated laws that "trigger prolonged regulatory scrutiny and years of spurious litigation." This effort would include stopping the EPA's current effort to use the Clean Air Act to impose a costly cap-and-trade system on the U.S. economy. It is declared in the plan: "Romney will work to amend the Act and remove carbon dioxide from its purview." Indeed, the EPA's agenda, including imposing CO2 emission caps, threatens to hike energy costs dramatically, and severely undermine U.S. entrepreneurship, business, competitiveness and jobs.
Third, Mr. Romney proposes updating the inventory of U.S. energy resources. In the plan, it's pointed out: "Surveys and inventories of resource deposits are decades out of date-when they have even been done at all. As a result, we have only a partial picture of the opportunities available to us. A Romney administration will conduct a comprehensive survey of our untapped resources so that policymakers and developers have a full picture from which to work." This is common sense, and the fact that it has not occurred, and is not updated regularly, is a glaring, shameful example of unwarranted influence by radical environmentalists over policymaking.
Along these lines, fourth, the Romney plan would "permit drilling wherever it can be done safely, taking into account local concerns. This includes the Gulf of Mexico, both the Atlantic and Pacific Outer Continental Shelves, Western lands, the Arctic National Wildlife Refuge, and off the Alaska coast. And it includes not only conventional reserves, but more recently discovered shale oil deposits as well." This dramatic shift in policy would be a clear positive for U.S. businesses and consumers in terms of energy prices and reliability, not to mention new business and job creation in the energy sector.
Fifth, the Romney plan calls for working closely with Canada and Mexico to develop energy resources, including "ensuring rapid progress on the Keystone XL Pipeline," and paving "the way for the construction of additional pipelines that can accommodate the expected growth in Canadian supply of oil and natural gas in the coming years." Again, a smart step that would present tremendous benefits for the U.S. economy.
Sixth, the Romney plan notes the enormous recent finds in natural gas in the U.S., the importance of "fracking" to extract those resources, and that "states have carefully and effectively regulated the process for decades." Here is another critical difference compared to current energy policymaking. For example, it is stated in the Romney plan: "While fracking requires regulation just like any other energy-extraction practice, the EPA in a Romney administration will not pursue overly aggressive interventions designed to discourage fracking altogether."
Unfortunately, the Romney plan cannot resist the temptation to spend tax dollars on energy subsidies. Typically, the case for subsidies is dressed up as long term investments, and that is the case in this plan as well.
So, point seven on the Romney energy plan declares: "Government funding should be focused on research and development of new energy technologies and on initial demonstration projects that establish the feasibility of discoveries."
And the final point adds that "the main line of policy should be directed toward technologies that will replace imported oil with domestically produced fuels or electric power," and that funding should come from "non-political sources." Of course, in the end, all spending by government is political, and no sound economic reason exists that government should be involved in subsidizing such speculative ventures. It's nothing more than a waste of taxpayer dollars, as the free market is more than capable of research, inventing and innovating.
In the end, though, especially compared to current policies, the Romney plan would be a dramatic improvement in U.S. energy policy.
Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.