Playing Dirty

Can Big Oil deliver the election to Mitt Romney?

Read about key swing states here. 

Is Barack Obama sufficiently dirty to win re-election? Not according to presumptive Republican nominee Mitt Romney, who says the president is too spic and span.

Calculating that clean energy is passé among Americans more concerned about jobs and their own pocketbooks, Romney is gambling that he can tip swing voters his way by embracing dirtier air and water if the tradeoff is more employment and economic growth.

Romney's gamble is essentially a bet on the demonstrated disruptive potency of shale gas and shale oil, which over the last year or so have shaken up geopolitics from Russia to the Middle East and China. Now, Romney and the GOP leadership hope they will have the same impact on U.S. domestic politics, and sweep the former Massachusetts governor into the White House with a strong Republican majority in Congress.

A flood of new oil and natural gas production in states such as North Dakota, Ohio, Pennsylvania, and Texas is changing the national and global economies. U.S. oil production is projected to reach 6.3 million barrels a day this year, the highest volume since 1997, the Energy Information Agency reported Tuesday. In a decade or so, U.S. oil supplies could help to shrink OPEC's influence as a global economic force. Meanwhile, a glut of cheap U.S. shale gas has challenged Russia's economic power in Europe and is contributing to a revolution in how the world powers itself.

But Romney and the GOP assert that Obama is slowing the larger potential of the deluge, and is not up to the task of turning it into what they say ought to be a gigantic jobs machine. The president's critics say an unfettered fossil fuels industry could produce 1.4 million new jobs by 2030. They believe that American voters won't be too impressed with Obama's argument that he is leading a balanced energy-and-jobs approach that includes renewable fuels and electric cars.

The GOP's oil-and-jobs campaign -- in April alone, 81 percent of U.S. political ads attacking Obama were on the subject of energy, according to Kantar Media, a firm that tracks political advertising -- is a risk that could backfire. Americans could decide that they prefer clean energy after all. Or, as half a dozen election analysts and political science professors told me, energy -- even if it seems crucial at this moment in time -- may not be a central election issue by November.

Yet if the election is as close as the polls suggest, the energy ads could prove a pivotal factor. "Advertising is generally not decisive. Advertising matters at the margins. ... But ask Al Gore if the margin matters," said Ken Goldstein, president of the Campaign Media Analysis Group at Kantar Media. "This is looking like an election where the margin may matter."

Romney is hardly the first major U.S. presidential candidate to embrace Big Oil. The politics of clean go back to Lady Bird Johnson's war on litter and Richard Nixon's embrace of environmentalism. But both presidents Bush came from the oil industry, and former Alaska Gov. Sarah Palin, the last GOP vice presidential nominee, gleefully led chants of "Drill, baby, drill" in 2008. Yet President George W. Bush also famously declared that "America is addicted to oil" in his 2006 State of the Union address, and initiated most of the energy programs for which Obama is currently under fire. And Palin's drumbeat in the end seemed to fall flat.

The Republican efforts appear to go beyond any modern campaign in their brash embrace of what is dirty, and their scorn of what is not. And the times seem to favor them. In 2009, the GOP, backed by heavy industry lobbying, knocked back environmentalists on their heels by crushing global warming legislation. Other previously central issues -- Afghanistan, Iraq, health care -- are still debated in the campaign, but not as centrally nor as viscerally as energy, said Frank Maisano, an energy and political analyst at Bracewell & Giuliani, a Houston-based law firm.

Obama advisors have said rightly that energy is only one component of a much broader American and global economy, but the GOP appears to have at least partially successfully injected the oil and gas boom as a defining feature of the economic discourse. In a Sunday op-ed in the New York Times entitled "America's New Energy Reality," industry consultant Daniel Yergin remarked that while Obama's 2010 State of the Union address focused on clean-energy jobs, the president pivoted this year to talk as much about oil and natural gas. "His announcement that ‘American oil production is the highest it has been in eight years' turned out to be an applause line," Yergin noted.

Romney grants that Obama is not precisely Mr. Clean -- while the president has championed clean energy technologies, he has also stewarded over the greatest buildup in U.S. fossil fuel production since the 1990s. But Romney insists he will be dirtier: He vows to open more land to oil and gas drilling, approve the import of more Canadian oil sands to Gulf Coast refineries, and allow more coal mining. As for Obama, Romney recently told a Colorado coal community, he isn't dirty enough to deserve a second presidential term. The president has "made it harder to get coal out of the ground; he's made it harder to get natural gas out of the ground; he's made it harder to get oil out of the ground," Romney said.

The approach aligns with a campaign by the American Petroleum Institute, the U.S. oil industry's main lobbying arm, called "Vote4Energy." The API campaign, which consists of big political events and advertisements, targets 15 or so mostly swing states, those that both Obama and Romney will most need to muster the 270 electoral votes required to win.

Marty Durbin, executive vice president at API, told me that the Vote4energy campaign is deliberately not backing any specific candidate or party, but attempting to centrally fix the subject of greater fossil-fuel drilling in voters' minds. "We're using this to highlight the importance of energy to the broader policy, that with the right energy policies we can have job creation, economic growth, energy security, government revenue. If voters have these realities in their mind when they go to the ballot box, that's what is going to move us forward in having a more rational national energy policy," he said. Already, he said, "the energy conversation is no longer just production and energy security. This is about job creation on a state-by-state level."

Notwithstanding Durbin's disclaimer, the API campaign seems to weave seamlessly into the GOP strategy. And Maisano told me that he sees grist for GOP success in the targeted states. "Energy plays a huge role in those states, and I see it as a huge problem for Obama," he said. "It's going to be hard for him to win these states that he has to win, like North Carolina, like Florida and Michigan and Ohio and Missouri and Wisconsin. Energy undercuts him in those economies."

Some analysts think the dirty campaign will ultimately fizzle. "The Romney campaign has positioned itself to beat the job-creation drum better than the Obama campaign has," said Kyle Saunders, a professor at Colorado State University, but an improvement in job numbers could undermine the GOP narrative. In addition, said John Sides, a professor at George Washington University, Obama's incorporation of fossil fuels in his energy policy may muddle the picture for voters. "I'm not sure that there is a lot of daylight between Obama and Romney," Sides told me.

Yet my own impression is that the Republican strategy may be working, at least partly and at least for now. Given the stakes, Obama and the main environmental lobby seem more lethargic than they might be. When I sought comment for this story, API responded almost immediately with an offer to speak with Durbin. Not so much the Sierra Club, the principal bulwark of U.S. environmentalists. A spokeswoman missed a couple of emails sent over a couple of days, then by phone said she would try to scare up someone to speak. Finally, I finally received a message: "I haven't been able to track down our political team today." In an election that may be decided on the margins, advantage: fossil fuels.

Whitney Curtis/GettyImages

Democracy Lab

Africa Takes Off

Sub-Saharan Africa is starting to shed its reputation as an economic laggard. The West should pay attention.

Pity sub-Saharan Africa -- but maybe for not much longer. In the first decade of the new millennium, six of the world's ten fastest-growing economies (Angola, Nigeria, Ethiopia, Chad, Mozambique, and Rwanda) were from this region. And in eight of the past ten years, it has grown faster than Asia.

To be sure, some of the region's growth stars owe their success in part to the global boom in commodity prices, most notably in oil. But Ethiopia managed to grow by 7.5 percent last year without producing a drop of petroleum. (Ethiopia's brightest newest export: cut flowers.)

Note, too, that average incomes in sub-Saharan Africa are still very low; for example, the per capita income in Chad is below $1,800 measured in terms of purchasing power, less than a tenth that of Poland or the Czech Republic. It will thus take decades of growth to bring living standards to acceptable levels.

But according to the IMF, the region is on track to grow by six percent this year, about the same as Asia. And there are convincing reasons to believe that a healthy pace can be maintained for the foreseeable future. Indeed, in the World Bank's view, Africa "could be on the brink of an economic take-off, much like China was 30 years ago, and India 20 years ago." That should be raising doubts about the appropriateness of international assistance policies based on the presumption that Africa still lacks the capacity to break out of its dispiriting cycle of poverty, dysfunctional governance and tribal violence. More on that later.

Ready to be surprised? Trade between Africa and the rest of the world tripled in the last decade. And by no coincidence, Africa has attracted more private foreign investment than official aid since 2005. Consider, too, that Africa's share of global foreign direct investment -- the most prized sort, since it brings along technology and management skills -- rose from less than one percent in 2000 to 4.5 percent in 2010.

But perhaps the most visible evidence of widening prosperity is the incredibly rapid penetration of mobile communications. Take Ghana, which, by the World Bank's reckoning, graduated to middle-income status last year. In the late 1990s, the country has a mere 50,000 working phone lines in a country of nearly 20 million. Now, three-quarters of the population has access to cell phones with both voice and instant-message capability.

In fact, the amount of money directed towards phone use has forced government bean counters to reconsider their (sometimes very rough) estimates of the region's income. In Ghana's case, the government recently revised upwards its estimate of private GDP by an astonishing two-thirds.

This telecom revolution is generating vast, unanticipated benefits. For example, farmers with phones now have access to timely market information, which makes it possible for them to bargain more effectively with middlemen. And "mobile money" -- credits transferred securely from one phone to another by instant message -- makes banking possible where bricks-and-mortar banks hardly have a presence.

No true "innovation cluster" yet exists in Africa. But the nexus of mobile telecom networks and financial services has spawned a collection of tech-oriented businesses in Nairobi, with Safaricom, Kenya's largest mobile supplier, at its hub. (The image above shows Nairobi by night.) The not-fully-realized value of wireless technology is encouraging entrepreneurs to think big. Very big: the Indian telecom Bharti Airtel paid $10.7 billion in 2010 for the African mobile-phone networks of a Kuwaiti-based Zain Telecom.

Zambia, which also made the cut to lower-middle-income status last year, illustrates much of what's good that's happening to sub-Saharan Africa. The economy has been averaging five percent-plus growth over the past seven years. That's due in part to the cyclical boom in copper prices, Zambia's chief export. But Zambia's agricultural sector is doing very well, too. The production of corn, a staple, leaped by 50 percent in 2010. The record harvest, by the way, illustrates the importance of good governance; Accra's timely distribution of subsidized fertilizer to small farmers made a big difference in yields.

The Zambian experience has been matched in neighboring Malawi, long a country plagued by food shortages and famine. Several years ago, the government launched a program (against the advice of international aid agencies) to both subsidize fertilizer and to support corn prices through purchases. Malawian farmers are now growing enough corn to satisfy domestic demand and have some left for export to its poster neighbor of bad governance, Zimbabwe.

There are good reasons to believe that this agricultural boom will endure beyond the general commodities boom driven by Chinese and Indian demand. First, Africa possesses 60 percent of the world's uncultivated arable land. So while the region is still a net importer of food, there's no hard economic barrier to considerable expansion of production. Second, improved communications and transportation is making it practical to expand intra-regional food trade. Indeed, agricultural economist Steven Haggblade at the Michigan State University argues that the key to food security in Africa is increased investment rural infrastructure.

Another reason for optimism about the sustainability of growth is the reduced likelihood of war. Scott Straus of the University of Wisconsin estimates that "African civil wars in the late 2000s were about half as common compared to the mid-1990s." What's more, "contemporary wars are typically small-scale... and involve factionalized insurgents who typically cannot hold significant territory or capture state capitals."

The reasons for the decline in organized violence are not altogether clear. But there seems little doubt that economic growth makes war less likely, and less war makes growth more likely.

The improved economic picture across sub-Saharan Africa has yet to translate into innovative approaches to the region by the international community. The U.S., Europe and Japan, the leading suppliers of technical assistance, grants and loans to Africa, still largely build policies on the premise that the region is mired in poverty and that the prevention of the worst forms of human degradation -- death by untreated disease, starvation, lack of  clean water and physical security -- is a much higher priority than the more complex issues of building institutions that support macroeconomic stability, public infrastructure and efficient market incentives.

One reason is the persistent belief that African growth isn't sustainable because it is largely dependent on steep rises in export prices for everything from cotton and cocoa to oil and copper. Certainly the boom has mattered. But as I discuss above, much points to the conclusion that growth is not transient this time around.

Population expansion also casts a cloud over Africa. So when computed on a per capita basis, GDP growth remain substantial -- but not as substantial as one would like. Here, too, though, the big story is positive: Fertility rates are falling almost everywhere in Africa.

There are subtler forces at work here, though, which retard the evolution of thinking about aid. Many governmental and non-governmental aid organizations have traditional commitments to combating famine and other extreme forms of suffering are institutionally reluctant to shift focus.

Cynics would argue that the change would make fund-raising (both private and public) more difficult -- the slow accretion of productive capacity just isn't very media-genic. I suspect it is more closely tied to the need to shift from tried-and-true strategies of delivering charity to the far more difficult task of encouraging institution-building and managing the ambiguities of interest-group conflict.

This glass is three-quarters full. Sub-Saharan Africa really does seem to be following other regions in building solid economies on the rock of institutional stability, free markets and more open trade, especially between African countries. Yes, ordinary Africans would benefit if international donors to acknowledged the new realities -- and there is a lot more that could be done by outsiders to accelerate positive changes.