Obama Speech May Set Natural-Gas Production Goal

January 24, 2012
Wall Street Journal
DEBORAH SOLOMON And LAURA MECKLER

President Barack Obama will use his State of the Union speech Tuesday to call for an increase in domestic energy production and may set a production target for natural gas, according to people familiar with the White House's plans.

Mr. Obama is expected to tout the economic and energy security benefits of increased U.S. oil and gas production, a message that's unlikely to sit well with some of the president's environmental supporters but could blunt industry and Republican criticism of his policies.

The president's speech is expected to call for increased oil and gas production, both offshore and onshore, and he will highlight a drop in U.S. oil imports, although some of that decrease stems from reduced demand amid a weak economy.

One idea being discussed within the White House is to include a natural-gas production goal. Such a move, if included in the final version of the speech, could help convey the message that the administration doesn't intend to slow production through regulations.

"This is sending a signal that the administration is in favor of gas production, which will be interpreted as a signal that they will not get in the way of gas production," said a person familiar with the White House plans.

Mr. Obama is also expected to talk about renewable-energy sources, such as wind and solar, and may call for extending a production tax credit to spur investment in those areas.

The oil and gas industry doesn't view the administration's approach to natural gas as hands-off and said it expects additional regulation in the future.

"We hear positive statements about natural gas but the administration now has eight different departments and agencies reviewing, with the intent to regulate, the high-tech practice of hydraulic fracturing," said Jack Gerard, president of the American Petroleum Institute. He said production in the U.S. has increased "in spite of the administration."

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