Analysis: Obama likely will look to ride on energy industry’s economic success

By Linda Hsieh, managing editor

Although the reelection of President Obama last week means a Democrat will occupy the White House for at least four more years, the energy industry doesn’t have much to fret about in terms of energy policy, University of Houston political science professor Dr Richard Murray reassured attendees of the 2012 IADC Annual General Meeting in Scottsdale, Ariz., on 9 November. “Presidents, at the end of the day, pretty much do what they have to do economically, and right now that is not go after your industry. It’s growing, it’s successful, it’s creating jobs, and some of those jobs are in places that really matter – like Ohio and Pennsylvania,” key swing states that could help decide the next presidential election, Dr Murray said.

The president also knows that he doesn’t have very many strong economic cards out there right now, Dr Murray continued. “The recovery of the domestic energy industry is one of the best things happening, and he’ll ride it to some considerable degree because he doesn’t have very many other assured areas for economic growth than this industry.

Further, the ups and downs of the drilling industry are still primarily driven by global economic conditions, not which political party is occupying the White House. “You’ve never had a better friend probably than Ronald Reagan and George H.W. Bush, and your rig count plunged in the mid-‘80s. They were more interested in breaking the Soviet Union than helping friends in Houston,” Dr Murray said.

Providing an analysis of the 2012 election and how President Obama was able to defeat his Republican opponent, Mitt Romney, Dr Murray notes that luck had a lot to do with it. For one, the Republican field of nominees had never been weaker, he said. Second, Mr Romney had to endure a long and bitter fight to secure the Republican nomination that impaired him before he even began his run in the general election.

On the other hand, no one of consequence ran against President Obama on the Democratic side. “If you’re a sitting president and you don’t have to fend off a challenger, even a minor one … it enormously helps you set up for the general election,” Dr Murray said.

President Obama was also financially secure. With funds left over from the $750 million he raised in the 2008 election, he was able to keep his political operation going in key states like Ohio. Mr Romney, however, had already spent most of his funds by July trying to get the Republican nomination. “The money he had raised to run in the general election was unavailable because it’s put in a lock box until you get the Republican nomination. Well, that isn’t going to happen until the end of August,” Dr Murray explained.

The primaries fight not only left Mr Romney without the money to run counter ads against the president through July and August, but it also left him with highly unfavorable marks among the public. “Mr Romney, battered by his Republican opponents in the primaries, saw his negative ratings go way above 50/50. It’s very hard to be elected president of the United States if more people have an unfavorable opinion of you than a favorable opinion, whatever’s happening in the economy,” Dr Murray said.

By the time Mr Romney got access to his funds after the Republican convention and began running counter-attack ads, Dr Murray notes that “a lot of the cake had by now been baked because what weakened the ability of Romney to turn this around by television advertising were, people were absolutely fed up with the ads by September/October.”

Another factor that swung in President Obama’s favor is that the electoral map no longer provides Republicans an advantage the way it did back in the 1980s, and the main driver is California. According to Dr Murray, during the 1994 gubernatorial election, Republican Pete Wilson took a hard line against illegal immigrants, deeply offending Latino voters and driving away Asian voters as well – two hugely growing populations in California. “By 2000, just six years later, the Gore campaign said, ‘We’re not going to spend a nickel in California. We’ve got it. It’s our state.’ … In 2004, Kerry won it easily. In 2008, Obama even more so. Three days ago, huge Democratic win in the state.”

In effect, losing California’s 55 electoral votes flipped the electoral map for Republicans, noting that President George W. Bush got 286 electoral votes with approximately 51% of the popular vote back in 2004, yet President Obama will end up with 335 electoral votes with approximately the same percentage of the popular vote. “The map has changed pretty dramatically, mostly because of California going from leaning Republican to safely Democratic,” he concluded.