Romney’s energy revolution

Stolid Mitt Romney has come up with an energy plan with a stinger in its tail. The mainstream media, fixated on distractions of the Democratic matador’s cape infuriating the fiery payroll bull, virtually ignored it. Energy aficionados reacted with a ho-hum since it calls on hoary common sense arguments. But it contains a magnificent hidden route for helping solve the fiscal crisis and the road back to vibrant federalism.

Romey’s promise of North American energy independence by 2020 may or may not be achievable, but incontestable as a goal. When history of this era is written, exorbitant transfer payments for Mideast oil to benighted despots financing Islamicist fanaticism may go down as its greatest threat. Mideast oil was, after all, developed by American capital [savings], technology and management. A failure of will led to its expropriation and the drunken path world energy has been on ever since. The world continues to pay a high price for that lapse of fortitude.

Romney’s answer to the clichéd “energy independence” is nuanced, for example, including Canada and Mexico. He puts a point to criticism of Pres. Obama’s sloshing subsides to friends and bankrupts for solar and wind. Yes, he implies, we should be moving away from fossil fuels – although like Mark Twain, reports of their death have been exaggerated with the slate revolution expanding reserves by decades. With his own expertise in that clan, Romney says government impersonating venture capitalist is inherently bogus; Washington is not good at picking winners and losers. Subsidize scientists searching for renewables instead of throwing vast sums at amateur entrepreneurs flopping in a premature market. Until further scientific breakthroughs do come, Washington is only subsidizing Chinese exporters to American pseudo-markets.

Romney, like most experts, would open the energy storehouse the Obama Administration – with the help of a berserk Enviromental Protection Agency – has slammed shut. That would include everything from the Keystone Pipeline bringing Canada oil sands crude to Houston refineries to expanded drilling offshore and on federal lands. It goes without saying such uncapping of fossil fuels – Romney includes coal – would go to the heart of our present economic crisis, jobs.

But the hidden nugget in Romney’s proposal is a much more ambitious concept: it implies rewriting the 1920 Mineral Leasing Act. A product of the Progressive movement’s late 19th century effort at conservation in the Robber Baron Era, like many reforms it has turned into an economic nightmare, a landgrab by a ruthless bureaucracy hand in hand with special interests. Rewrite of an earlier law removed from settlement an eighth of U.S. land and coastal waters. All you have to do is look at fees to know how much it needs revision: the Feds’ bonus [an initial payment], rental [$2 per acre], and royalty [1/8 or 12.5% of the gross value of oil and gas]. Romney’s bombshell would be to turn governance back to the states.

You get some idea of what might be possible in the case of offshore Virginia. Its identified reserves may be as much as a billion barrels of oil and 2.5 trillion cubic feet of gas. Even under present terms their exploitation could net the state $2 billion over a decade besides secondary economic activity, including, again, jobs. States would have options. But environmentalista opposition which now forecloses California and Florida is likely to melt in the face of new safeguards and desperate need for state revenues, Hollywood glitterati notwithstanding. Inland states can look to shale development, already a reality on private lands in New York, Pennsylvania, North Dakota and Montana.

There will be problems, of course, and not just legitimate environmental concerns. But new state revenues hold the promise of reversing growing dependence on federal handouts sucked up through the world’s champion tax collector, the Internal Revenue Service. It would facilitate federal spending cuts all concede necessary, including a return of education and other functions to the states for their efficacy and ability to innovate.

Romney’s election wouldn’t be enough to see such a program through. It would require Congressional action, efforts now blocked by Senate Democratic control. But mere launching the idea is as bold as Romney says his father’s advice would have been to another generation of presidential aspirant. It may yet stimulate Washington’s intellectual juices after the white heat of this fall’s partisan battle dies away.



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