US Dithers as the World Feasts on New Energy
Countries around the world are celebrating new oil and natural gas discoveries that hold the promise of greater prosperity for their citizens.
Argentina has just announced a find described by YPF CEO Miguel Galuccio as a “mother rock,” a shale formation that elevates the country to having the third largest shale energy potential behind the United States and China.
The new discovery of a 3.3 billion barrel oil deposit off Norway’s coast cements that nation’s claim to being Europe’s second largest oil producer.
In southwest Poland, San Leon Energy PLC drilled into a dolomite formation and discovered oil as it was cleaning out the well. It is in the process of equipping the well to begin production.
These discoveries and others in Mexico, Egypt, China and elsewhere in August 2012 likely were accomplished using U.S.-developed technologies and will rely on U.S. drilling procedures. And each one is expected to create jobs, increase government revenues, and result in a higher standard of living for people around the world.
Yet here in America, our administration continues to view oil and natural gas development – and U.S.-based technological advances – with hostility. During President Obama’s tenure in office, his administration placed a moratorium on U.S. offshore oil and gas production, refused to approve the Keystone XL pipeline bringing oil from Canada to Gulf Coast refineries, issued a five-year drilling plan that puts 85 percent of the Outer Continental Shelf (OCS) off-limits to energy development, and repeatedly proposed to raise taxes on the oil industry, which would have the effect of reducing the industry’s ability to invest in the search for energy.
To its credit at the end of August, the administration finally agreed to allow Shell to drill in Alaska’s Chukchi Sea, but it added conditions that make it unlikely that the company will be able to complete a single well this fall.
Under the administration’s guidelines, Shell can drill only to a depth of 1,400 feet and must not penetrate oil-bearing rock until a Coast Guard-certified oil spill containment barge is on site. The administration also has imposed a drilling deadline of Sept. 24 – this after Shell spent nearly $5 billion preparing to drill in the area.
By imposing such heavy-handed controls, the administration claims to be protecting the environment. In a conference call with reporters, Interior Secretary Ken Salazar pledged to hold “Shell’s feet to the fire” to ensure Arctic waters remain unaffected.
Protecting the environment is important, but by holding back energy development the administration is blocking one of the best ways to put Americans back to work and help to solve the U.S. debt crisis.
According to a study by Wood Mackenzie, opening U.S. energy-rich areas to development and building the Keystone pipeline could create 1.4 million jobs and generate $800 billion in government revenues by 2030. And the economic benefits would accrue nationwide, including in the so-called swing states.
Pro-energy development policies would result in the creation of 100,000 jobs in Florida by 2016, and Colorado would gain 85,000 energy-related jobs by 2030. By 2015, Pennsylvania would win 76,000 new jobs, and West Virginia would get 17,000 jobs.
Despite this year’s tight presidential contest where the stagnant economy is taking center stage, the administration is continuing to focus on green energy projects, including solar and wind, requiring massive government subsidies. The president also recently signed an executive order directing several government agencies to invest in energy efficiency. That’s a laudable goal, but considering that the U.S. uses half as much energy today as in 1980 to produce each dollar of gross domestic product (GDP), one has to wonder how much more efficiency can be squeezed out of the U.S. manufacturing sector and at what cost.
The fact is that America will need more energy in the years ahead, and despite gains from wind and solar, the Energy Information Administration (EIA) projects that 78 percent of the nation’s energy demand will be met by oil, natural gas and coal in 2035. There is no readily-available or affordable substitute for traditional energy resources.
Rather than throw taxpayers’ money at favorite projects, the administration could better meet the needs of American families by unleashing the power of private enterprise. Let the individuals and the companies who have the expertise to drill and mine do what they do best—supply Americans with secure, affordable and reliable American energy.