Tags: Obama | US | Oil | pipeline

Obama Vows More U.S. Oil Production as Pipeline Gets Priority

Thursday, 22 March 2012 01:19 PM

President Barack Obama, defending his energy policy from Republican criticism, vowed his administration will support domestic oil production while saying that won’t be enough by itself to bring gasoline prices down.

“Anyone who says that we’re somehow suppressing domestic oil production isn’t paying attention,” Obama said, according to the text of remarks he’s delivering in Cushing, Oklahoma, where TransCanada Corp. plans to begin building the southern segment of its Keystone XL oil pipeline.

Obama said he’s taking steps, first promised in his State of the Union address in January, to streamline the federal permitting process for critical infrastructure projects, including pipelines such as the one planned by TransCanada to deliver oil to refineries on the Texas coast.

“We’re making this new pipeline from Cushing to the Gulf a priority,” Obama said. “We’re going to go ahead and get that done.”

Standing in front of pipes that will be used to reroute the bottleneck of oil stored at a site at Cushing, the president began the second day of a four state trip aimed at fending off accusations by Republicans that his energy policies are to blame for higher gas prices.

Obama’s action won’t speed up the timeline for the project, which already is slated to start construction as soon as June. TransCanada is awaiting permits from the U.S. Army Corps of Engineers, the last it needs to begin construction, according to the company.

Political Issue

The two-day swing marks the latest in a series of energy- themed speeches and trips the president has made across the country and in battleground states over the last several weeks. He highlighted solar energy in Nevada and domestic gas production in New Mexico yesterday and he’ll be in Ohio later today to talk about energy research. Obama won all three states in 2008 and they are being targeted by both parties for the November election.

While Oklahoma is solidly Republican -- the state gave 65 percent of its vote to Arizona Senator John McCain in the 2008 presidential election -- its status as an oil transit hub gives Obama a backdrop to emphasize his “all-of-the-above” energy strategy.

With the U.S. recovery gaining traction, rising fuel prices are a potential setback to growth by crimping consumer spending, which makes up 70 percent of the economy. That makes it a potential political vulnerability for Obama as he seeks a second term.

Higher Prices

The average retail price of a gallon of regular gasoline is $3.88, according to a daily survey by the American Automobile Association, up from $3.57 a month ago.

The Keystone pipeline has emerged as a point of attack by Republicans in Congress and on the presidential campaign trail.

In January, Obama denied approval for TransCanada’s $7.6 billion Keystone XL oil pipeline from Canada to the Gulf of Mexico. He blamed congressional Republicans for imposing a deadline on his decision that he said left no time to approve the project in the face of objections from Nebraska politicians over the route. His administration invited TransCanada to reapply, an overture the Calgary-based company accepted.

Republican presidential candidate Mitt Romney has called for Obama to fire his energy and interior secretaries and the administrator of the Environmental Protection Agency.

“This president has failed us when it comes to gasoline and energy,” Romney said last week while campaigning in Illinois.

Global Market

Obama has countered that oil prices are set by the global market and are rising because of increasing demand from fast growing economies such as China, India and Brazil and uncertainty caused by tension with Iran, the No. 2 producer in the Organization of Petroleum Exporting Countries after Saudi Arabia.

“The main reason that gas prices are high right now is because people are worried about what’s happening with Iran,” Obama said. “It doesn’t have to do with domestic oil production.”

Oil fell to a one-week low after manufacturing in the euro area and China contracted this month, signaling that fuel consumption may decline. Crude for May delivery fell $2.50, or 2.3 percent, to $104.77 a barrel at 10:55 a.m. on the New York Mercantile Exchange.

The administration argues that domestic oil production is at an eight-year high and natural gas production is at an all- time high. New vehicle fuel economy standards put in place by Obama will cut oil consumption by 2.2 million barrels a day, according a White House fact sheet.

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Thursday, 22 March 2012 01:19 PM
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