August 23, 2012

The Romney-Ryan Energy Plan: Back to States' Rights

Based on what the Romney-Ryan team has said so far on energy, I expected their energy plan today would be something like the National Energy Policy of 2001, delivered by Vice President Dick Cheney four months after George W. Bush’s inauguration.  I thought that their energy plan would simply be a retread of old thinking, much like their education policies.  But today’s plan goes to a whole new level.

The 2001 plan, famously developed behind closed doors, predicted a 30% growth in energy demand by 2020, increased dependence on foreign oil, and an increased gap between domestic production and demand, all contributing to the need for greater domestic energy production.  After reading the Romney-Ryan plan, I have (and I do not believe that I am saying this) a little nostalgia for the Cheney Plan, for two reasons.  First, even though the Cheney’s task force gave prominent seats to fossil fuel companies, most notably coal and oil, at his energy planning table, the Plan did recognize that the United States was realizing significant gains in energy efficiency; that renewable resources should play a role in our energy portfolio; that clean energy tax credits were useful; and, that clean energy R&D funding should be increased. 

Second, I was completely wrong about Romney-Ryan going back a decade.  I was off a century.  The heart of the Romney-Ryan energy plan puts the country back to the turn of the 19th into the 20th centuries, not to the turn into the 21st century.  In the late 19th and early 20th centuries, energy industries were regulated, if at all, at the local and then at the state levels.  There was a technological reason for local regulation – energy industries were located intrastate.  Interstate and national markets were just developing and federal regulation had the direct effect of creating national energy markets and supporting the fossil fuels traded in them.  Federal regulation created and sustained the energy markets that the states could not.  Federal regulation promoted fossil fuels, facilitated a national infrastructure of oil and natural gas pipelines and electricity transmission lines, and eventually the entire nuclear power industry. 

Let’s peek at the Romney-Ryan plan for U.S. energy independence.  There are two key documents – a blog post entitled An Energy Blueprint for America and a lengthier white paper entitled The Romney Plan for A Stronger Middle Class: Energy Independence

Of the two documents, the one page Blueprint is more valuable if only because it is more direct.  In a phrase, the Romney-Ryan energy plan is all about “states’ rights.”  States should have more say, and in many instances supplant federal rules, in regulating natural gas, nuclear power, and renewable resources – even on federal lands.  Further bolstering states’ energy rights, federal regulations should be subject to further cost-benefit analysis of EPA rules; clean air regulations must be overhauled (i.e. reduced); subsidies must be restricted; and regulatory “burdens” on oil pipelines should be eased.  The Blueprint then calls on the federal government to promote the oil, natural gas, and power infrastructures, as well as open more of the Outer Continental Shelf to further oil and gas exploration and extraction.  After all, states’ rights can only do so much to favor the fossil fuel industries. 

The 20-page white paper is more than a bit of a ruse.  First, more than half of the white paper consists of quotations, mostly from press releases and newspaper stories, on a variety of energy and economic issues.  The quotations, of course, are not in context and, reasonably enough, serve as supporting statements for various political positions.  What the quotations do not, and cannot do, is provide context or sustained argument for the soundness of the policies Romney-Ryan announced.  Yes, a new energy economy will provide more jobs and will contribute to economic growth.  Yet, there is no evidence that a states’ rights approach, reliance on more fossil fuels, and reduced federal leadership will get us there.  Nor is there evidence that the Romney-Ryan approach will increase domestic manufacturing, as the plan announces.

In one crucial aspect, though, the white paper and the Blueprint diverge dramatically.  The Blueprint celebrates greater state authority over our energy economy, yet the white paper calls for a North American Energy Partnership with Mexico and Canada joining U.S. efforts to attain regional energy independence. To briefly decode that partnership, it means a full out commitment to fossil fuels – oil from Mexico, shale oil from Canada, and shale gas from the United States.

Nowhere does the white paper promote the development of either energy efficiency or renewable resources.  Instead, after wrongly, and quite frankly disingenuously, carping about the Obama Administration’s use of R&D, it says that federal innovation funding should be increased for fossil fuels, ignoring that fossil fuels have received outsized subsidies for a century.  Romney says that federal funding should not pick technological winners in the energy sector, but that the Obama Administration has.  Apparently, neither he nor his team have looked at the array of energy projects funded by the Department of Energy, especially in its ARPA-E, which funds a full array of energy technologies from cleaner coal technologies to biochemical energy in crops to energy storage to more efficient delivery systems.

The Romney-Ryan states’ rights platform simply does not fit either the rest of their energy plan nor make for a comprehensive national approach.  (1) The proposed North American Energy partnership cannot be undertaken by the states, it must be done at the federal level.  (2) A national energy infrastructure cannot be developed by individual states; it requires federal coordination. (3) Assuming that shale gas will play an increasingly important role in our energy future, uniform national environmental standards on hydraulic fracturing will serve industry, as well as consumers, better than multiple regulatory regimes.  And, (4) innovative energy technologies will not be adequately funded by the private sector and are most unlikely to be funded by the states at all.          

In short, the Romney-Ryan energy plan is audacious beyond anything contained in the Cheney plan, no matter how jaundiced a view of the former vice president one may have.  Taking the Cheney plan at face value, it was not nearly as myopic about fossil fuels as Romney-Ryan. It allowed for efficiency and renewable resources; it never embraced states’ rights as an organizing concept for a national energy economy; and, although beholden to the oil, gas, and coal industries, it did recognize the need for federal leadership across the full energy resources spectrum.  All of which is to simply say, the Romney-Ryan energy plan is extreme beyond imagination; it is incoherent, and would set back the transition to clean energy to a time past recent memory.

Joseph Tomain, CPR Member Scholar; Dean and Professor, The University of Cincinnati College of Law. Bio.

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