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Peakonomics: Mitt Romney and $100 diet
Posted on Thursday, September 6th, 2012

This article was published in NorthAmOil, 6 September 2012.

There seems to be a rule that every US presidential hopeful must promise energy independence but never deliver. Accepting the Republican nomination, Mitt Romney seemed to follow a well-thumbed script, claiming that by 2020 “North America will be energy independent by taking full advantage of our oil and coal and gas and nuclear and renewables”.

With US shale oil production booming, and the country’s oil demand in apparently structural decline, you could be forgiven for thinking this time might be different. But while developments in the domestic oil market will continue to cut US import dependency, those on the world stage make this more irrelevant than ever.

While Mr Romney nods to all energy sources, his energy plan – described in the Houston Chronicle as a “sloppy wet kiss” to oil and gas companies, who recently donated $10 million to his campaign in a single week – is overwhelmingly concerned with oil. The plan was launched last month in a white paper containing proposals to throw open federal lands and offshore waters to development, and slash the time it takes to secure drilling licences. The paper claims rising production will reduce US energy prices and create three million jobs. But this is wrong on two counts: US production has essentially no impact on global oil prices; and those prices are likely to remain at levels that prevent significant US jobs growth.

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