Indiana Gov. Mitch Daniels slammed the Obama administration for allowing "extremism" to block domestic energy production and construction of the Keystone XL pipeline, as the popular state executive offered Republicans' official response to the president's State of the Union address last night.

In his speech, Daniels, who focused largely on the nation's debt and unemployment, did not name the 1,700-mile pipeline that would carry oil sands crude from Alberta to the Gulf Coast -- but Obama did not mention it by name, either. The State Department rejected a permit for Keystone XL earlier this month over concerns about the pipeline's route.

Daniels also did not specifically mention recent Obama administration moves to boost regulation of pollution standards at power plants. But his intent in referencing both Keystone XL and U.S. EPA regulations were clear.

"The extremism that stifles the development of homegrown energy, or cancels a perfectly safe pipeline that would employ tens of thousands, or jacks up consumer utility bills for no improvement in either human health or world temperature, is a pro-poverty policy," Daniels said. "It must be replaced by a passionate pro-growth approach that breaks all ties and calls all close ones in favor of private-sector jobs that restore opportunity for all and generate the public revenues to pay our bills."

"That means a dramatically simpler tax system of fewer loopholes and lower rates," Daniels continued. "A pause in the mindless piling on of expensive new regulations that devour dollars that otherwise could be used to hire somebody. It means maximizing on the new domestic energy technologies that are the best break our economy has gotten in years."

Daniels also referenced a law requiring incandescent bulbs to be more efficient during a portion of his speech criticizing government regulations and oversight.

"In word and deed, the president and his allies tell us that we just cannot handle ourselves in this complex, perilous world without their benevolent protection," Daniels said. "Left to ourselves, we might pick the wrong health insurance, the wrong mortgage, the wrong school for our kids; why, unless they stop us, we might pick the wrong light bulb!"

Early in his speech, Daniels, who served as budget director to President George W. Bush before running for governor, asserted that the current economic recession should not be blamed on the White House but said the Obama administration had made the situation worse.

"So 2012 is a year of true opportunity, maybe our last, to restore an America of hope and upward mobility, and greater equality. The challenges aren't matters of ideology, or party preference; the problems are simply mathematical, and the answers are purely practical," said Daniels, who went on to suggest that entitlement programs including Social Security and Medicare need to be reformed.

Some Republicans look longingly to Indiana

It remains to be seen whether Daniels' performance may prompt him to take another look at the presidential race, particularly as Republicans have yet to coalesce around a single candidate -- though some GOP leaders privately wish he would.

Former Massachusetts Gov. Mitt Romney, former House Speaker Newt Gingrich of Georgia and ex-Sen. Rick Santorum of Pennsylvania have each won one of the caucus or primary contests to date. Rep. Ron Paul of Texas also remains a candidate.

National Republican Senatorial Committee Chairman John Cornyn of Texas said yesterday that a hotly contested presidential nominating fight that lasts beyond the Florida primary next week is nothing to worry about: "It's healthy," Cornyn said.

"For one thing, the president can't focus all his firepower on a single person now, and a lot of issues that would come up in the general [election] are now coming up in the primary. It'll make our candidates stronger," he added.

Still Daniels, in his second term as governor and known as a fiscal hawk, was seen as a desirable presidential contender when he briefly considered a bid last year.

Despite his tough talk on Obama's energy and climate policies, Daniels, during his tenure as governor, has been praised for his conservation efforts, including the preservation of Indiana wetlands (E&E Daily, April 8, 2011). Under his guidance, every county in the Hoosier State also met ambient air standards of the Clean Air Act in 2010.

But Daniels has also been the bane of state environmentalists, who criticized his support for the coal industry as well as so-called factory farms that are credited with excessive waste and air pollution.

Conservatives have also questioned Daniels' priorities, however, pointing to his promotion of his states' biofuels and wind energy, and carbon capture and storage technology development.

Reporter Elana Schor contributed.