Romney and Obama Square Off on Gas Prices - How Does Shale Factor In?

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From Fuel Fix:
Rising domestic production can help bring down the international price of oil and thereby promote lower U.S. gasoline prices. Both the President and Governor Romney made that point in last night’s debate and both promised rising U.S. production. For the current rise in U.S. production, the points really go to neither candidate but to the oil and gas industry for being so creative as to develop the new technologies to make production from shale viable.
Governor Romney said the President was blocking oil production by reducing leasing and permitting. President Obama made the point that U.S. production has been rising on his watch and blamed the oil industry for the leasing mess. I give some points to Governor Romney but he could have been clearer explaining how the President slowed production. The blocking of Keystone XL pipeline from Canada to the U.S. Gulf coast, a highly politicized move by the administration, is probably the most striking recent barrier to oil development. Pipeline delays not only made it difficult for North Dakota crude oil to reach U.S. Gulf coast refiners and thereby to lower oil prices beyond the U.S. midcontinent by bringing more supply competition to the international sweet crude market, but also such delays create uncertainty that slows upstream oil exploration investment, reducing future production.
In fairness to President Obama, one reason drilling and federal leasing in the U.S. Gulf of Mexico is down is due to the Macondo accident. Had the industry been better prepared with a real and effective spill response, a moratorium in the Gulf of Mexico wouldn’t have been necessary. In terms of onshore federal lands, oil company advocates say it takes longer to get a permit on federal, as opposed to state, lands. But again, if there were no incidents of illegal dumping of chemically laden process water in rural yards and streams and other kinds of unexpected ground water contamination, there would have been less of a public outcry against fracking. Without the problems, tighter permitting rules for federal lands, and the delays they have caused, would not have been necessary.
Last spring, the Obama administration passed new rules to bolster oversight on public lands for oil and gas drilling using fracking technology. The hope was that states would be able to use the federal standards as a guide to constructive regulation. Only a small fraction of shale wells have been drilling so far on federal lands (as opposed to state and private lands).
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