The Philadelphia Inquirer, July 31, 2008

by Larry Eichel

Even though the price of oil has gone down slightly in recent days, the nation's energy crisis has become the top domestic issue in the presidential campaign, with both major candidates seeking to turn it to their advantage.

Barack Obama, who talks about reducing the demand for energy and improving efficiency, sees the topic as a way to tie John McCain to the oil companies, which are very unpopular with many voters.

McCain, a supporter of offshore drilling and other ways to increase domestic production, is using it to make the argument that Obama is arrogant and out of touch with the pressing concerns of average people.

The Republican hammered home that point yesterday with a new commercial that includes images of Britney Spears, Paris Hilton, and the thousands who turned out for Obama last week in Berlin.

"He's the biggest celebrity in the world," the announcer says. "But, is he ready to lead? With gas prices soaring, Barack Obama says no to offshore drilling, and says he'll raise taxes on electricity. Higher taxes, more foreign oil, that's the real Obama."

This ad is the fourth in a tit-for-tat exchange between the candidates that has played out this month in battleground-state media markets, Philadelphia included.

The most recent Obama spot, now showing locally, shows a clip from an earlier McCain ad attacking the Democrat on energy. An announcer then asks in disbelief:

"John McCain is blaming Barack Obama for gas prices? The same old politics. Barack Obama thinks high gas prices deserve serious answers, and a serious plan: Crack down on oil speculators, raise mileage standards and fast-track alternative fuels."

On the campaign trail, the language is getting ever more pointed.

A few days ago, McCain described his rival as the "Dr. No" of America's energy future. "Sen. Obama believes that every domestic energy (OOTC:DMEC) source has a problem," McCain has said several times in his town-hall meetings. "I believe every energy source needs to be part of the solution."

Yesterday, in Springfield, Mo., Obama asked where McCain had been on energy policy for the last 25 years. The Illinois senator called expanded offshore drilling a "scheme" that would not bring down the price of gasoline for years but would have the oil companies "making out like bandits again."

Said Obama: "I know how bad people are hurting. If I thought by drilling offshore we could solve our problem, I'd do it. . . . The point is, this is not real. I know it's tempting . . . but it's not real."

As the rhetoric suggests, the two candidates approach the energy problem in different ways -- even though both offer multifaceted plans that acknowledge the complexity of the situation and the difficulty of doing much about it in the immediate future.

Obama's emphasis is using technology to reduce energy consumption and to spur development of renewable fuel sources such as wind, solar, tide and biofuels.

He proposes investing $150 billion over 10 years on "climate-friendly energy supplies." He would make energy efficiency and conservation a top priority. He estimates that those efforts could produce five million new jobs.

To help consumers in the short run, Obama proposes a $1,000 tax cut for most families and an energy rebate of unspecified magnitude as part of an overall economic-stimulus package.

McCain also talks about alternative energy (OOTC:AEGC) sources. He has proposed a $300 million prize to the "creator of a battery package [for motor vehicles] of a size, capacity, cost and power far surpassing existing technology."

But his priority is on the supply side. He would allow a new round of offshore drilling -- he opposed such drilling until last month -- and would revive the nuclear-power industry with the aim of building 45 new plants by 2030.

The United States now has 104 nuclear reactors, according to the Nuclear Energy Institute. No new plants have come on line since 1996.

Obama's position on nuclear power is not clear-cut. While not dismissing it as a possibility, his plan states that "there is no future" for nuclear power unless issues such as the storage of the waste and the security of the fuel are addressed first.

Republicans say that the energy issue, as currently framed, is a winner for their candidate. As Obama acknowledged in Missouri yesterday, polls show that a majority of Americans favor offshore drilling. The ratio is nearly 2-1 in some surveys.

In addition, polls show that voters accept expanded use of nuclear power as part of the energy solution, although it is not among their favorite options.

Much of the political conversation about energy, both in Congress and in the campaign, has concerned how much allowing more offshore drilling would affect current prices -- even though the drilling would take time to produce oil.

Martin Feldstein, a Harvard economist and McCain supporter, said Monday that in the marketplace, anything seen as affecting long-term oil supplies had "an immediate impact on today's prices." McCain has not said how much he thought prices might fall.

Obama said experts tell him that the offshore drilling wouldn't produce any oil for seven years and would then reduce prices by a few cents.

According to a report last year by the Energy Department's Energy Information Administration, "access to the Pacific, Atlantic and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030."