CAMPAIGN 2012:

Energy grabs the spotlight in raucous presidential debate

With all of the theatrics of a town hall-style presidential debate last night, President Obama and Republican challenger Mitt Romney sparred over who is the bigger "Mr. Oil" and "Mr. Gas" amid declining U.S. energy imports and rising domestic production.

For both candidates, this debate meant everything. The Obama camp had to stanch sliding poll numbers. Romney had to appeal to independent voters concerned that his policies are designed to help the very rich. In an hour-and-a-half debate on a stage at Hofstra University in New York, each claimed the mantle of middle-class defender, and they tied everything, particularly their ideas about energy, to more sweeping plans for creating jobs and lifting the economy.

Obama noted that U.S. natural gas production is the highest it's been in decades and touted the rapid expansion of wind power and manufacturing in Iowa and Colorado. Those things, plus rising U.S. oil production, he noted, have helped cut crude oil imports to their lowest level since the late 1990s.

"We've got to control our own energy," Obama said, "not only oil and natural gas, which we've been investing in, but also we've got to make sure we're building the energy sources of the future."

Obama and Romney circled each other. They grappled to score points on the issue of high gasoline prices, with Romney listing energy independence as the first piece of a "five-point" economic plan that includes incentives for small business and "cracking down on China" for holding down the value of its currency. He pledged to sign off on the Keystone XL pipeline to ship more Canadian oil sands crude into the United States and to speed up drilling permits.

The most heated exchange came over the issue of drilling on federal lands, when Obama and Romney approached each other on stage for the first time in the debate. At times talking over each other, pleading their cases, they disputed the facts.

U.S. oil and gas production has surged on private land in the past four years, making the United States "the new Middle East," according to one prominent analyst. But Romney followed the lead of oil and gas companies that complain the Obama administration has placed too many square miles of public lands off-limits. He pressed the president on a 14 percent drop in oil production and a 9 percent drop in gas production on public lands since 2010. The administration slashed licenses and permits, he said.

"So where did the increase come from? Well, a lot of it came from the Bakken Range in North Dakota," Romney said, asserting that the administration's enforcement of environmental laws puts that in jeopardy, too.

"I believe very much in our renewable capabilities -- ethanol, wind, solar -- would be an important part of our energy mix," said the former governor of Massachusetts. "But what we don't need is to have the president keeping us from taking advantage of oil, coal and gas. That has not been Mr. Oil or Mr. Gas or Mr. Coal."

Obama defended the administration's early policy of pulling the plug on oil leases that had languished for a decade or longer. He also pointed out that oil production on public lands was higher in his first three years than under the previous Bush administration. "These are public lands, so if you want to drill on public lands, you use it or you lose it," Obama said. "And so what we did was take away those leases, and we are now re-letting them so that we can actually make a profit.

"We're actually drilling more on public lands than in the previous administration -- and the previous president was an oil man," Obama said. "Natural gas isn't just appearing magically; we're encouraging it and working with the industry."

The fight over who deserves credit for an unconventional oil and gas boom that changed the economies of Pennsylvania, Ohio, Texas and North Dakota and slashed imports from the Middle East and Africa is becoming a mainstay in the partisan battle for control of the White House. But both candidates are struggling to explain what the trend means for gasoline prices, which remain high, and other national priorities such as the reduction of greenhouse gas emissions.

The numbers and explanations are a mixed bag. According to the U.S. Energy Information Administration, onshore crude oil production increased to 5.7 million barrels a day in 2011, a 3.2 percent increase, and is expected to surge ahead in 2012 to 6.3 million barrels a day. Most of that increase is out of the Bakken and the Permian and Eagle Ford oil and gas basins in Texas.

The technology-driven unconventional natural gas boom sped up in 2008, despite the ailing economy. It caused a glut of natural gas that drove down the commodity price and helped enable fuel-switching in the electricity sector. Coal has lost ground as electric utilities are turning to cheaper and cleaner gas and tougher federal air-quality regulations pushed by the Obama administration make it more expensive to operate coal-burning generators.

The trend lines for both domestic oil and gas production put the United States on track to slash oil imports. EIA analysts expect total net U.S. oil imports to hit 41 percent at the end of this year. Imports peaked at 60 percent in 2005.

Obama emphasized that oil and gas are part of a broader power portfolio that includes wind, solar and fuel efficiency. Romney put fossil fuels first. With his polling in Ohio still lagging, Romney pressed the case for more coal jobs, accusing U.S. EPA under the Obama administration of targeting coal plants through strident regulation of the industry. Obama responded with a quote from the former governor's earlier pledge to shut down a coal-fired power plant in his home state.

"Keep in mind, governor, when you were governor of Massachusetts, you stood in front of a coal plant and pointed at it and said, 'This plant kills,' and took pride in shutting it down," Obama said. "And now suddenly you're a big champion of coal."

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