The Promise and Challenge of U.S. Energy Infrastructure
Over the past two decades, America’s energy resources have consistently exceeded even the most bullish estimates — and they continue to grow. This month, the U.S. Energy Information Administration revised previous forecasts, predicting now that domestic crude oil production will reach record highs in February, three fiscal quarters earlier than previously expected.
This surge in production is happening in places once written off by politicians. In North Dakota, officials expect oil production on the Bakken shale play to hit a record high in the first half of this year. And in Texas, new data shows the Permian Basin contains more than twice as much recoverable oil as has been drilled over the past 95 years. Meanwhile, the Marcellus and Utica shale reserves are producing nearly 27 billion cubic feet of natural gas per day — the most of any region in the country.
Since 2005, U.S. natural gas production has increased by 68 percent, and federal calculations indicate that 2018 is likely to be another landmark year. Almost 7 billion cubic feet of new gas production is predicted to come online. Thirty-three percent of U.S. electricity will be generated by gas-fired plants, and plant operators plan to add 20 gigawatts of generating capacity, the most since 2004.
America’s indomitable output horizon — driven by shale development and new technologies that are improving efficiencies and reducing emissions — has been a godsend, from Pennsylvania Avenue to Main Street. The U.S. economy added 196,000 manufacturing jobs last year, lured back largely by reliable access to affordable fuels. And the United States will become a net-energy exporter within 10 years, giving U.S. officials the tools to support our allies, isolate our enemies, and mitigate volatility in global markets.
The remarkable transition from dependence to “energy dominance,” to borrow from President Trump, owes largely to every facet of the energy industry pulling in tandem. Prudent investment has augmented production possibilities; high-tech innovation and real-time data have improved safety; stronger public-private partnerships have built better protocols; and new technologies have cut CO2 emissions to 25-year lows.
However, like any integrated system, America’s energy networks are only as strong as the weakest link. And, regrettably, a combination of targeted campaigns, bureaucratic roadblocks, and misguided policy has put midstream suppliers in a vulnerable position.
The current political climate, tempered by a pervasive “not-in-my-backyard” mentality, has made it difficult, and often financially infeasible, for infrastructure builders to keep pace with oil and gas production. The federal regulatory process takes, on average, 70 months to complete. Perhaps worse, recent projects demonstrate that with enough activism, the rules can be changed even after they are approved. The uncertainty that such activism breeds is a huge deterrent to development, thereby hindering the possibility of greater of economic growth.
Simply put, it has become more difficult than ever before to construct midstream infrastructure. Pipeline developers are no longer able to place a new project into the ground quietly and efficiently. Instead, they are faced with a host of unprecedented challenges — from local elected officials building political capital by publicly opposing a project to highly visual opposition tactics by environmental activists seeking to tug at the heartstrings of viewers and readers across the country.
The false narrative that pipelines pose a risk to our communities and the environment — even though they have the strongest safety record of any energy transportation option — has been effectively foisted on the public by critics who insist on leaving energy resources in the ground. Few would object to a world run by renewable fuels. But the reality is that solar and wind supply only slightly more than three percent of our country’s energy needs. One need only to look at Germany’s failed bet on renewables to see the peril of leaning too heavily on this imaginary promise.
It’s even harder to justify such condemnations of oil and gas when these resources are helping bring to market alternative resources and reducing emissions. President Obama, hardly an advocate of fossil fuels, famously called natural gas a “bridge fuel” that will help reduce emissions. And it has. Carbon-dioxide emissions have fallen in 43 states over the past 10 years, and air pollutants have declined 73 percent since 1970.
The danger of targeting America’s midstream energy market — the infrastructure builders and operators — is clearly demonstrated by bottlenecks in the Northeast. When recent blizzards and frigid temperatures spiked demand for natural gas to heat homes, pipeline shortages created supply constraints. Prices quickly increased by 60 times the normal rate, and three times the highest rates in years — creating what’s been called the “world’s priciest market,” despite record-setting production in neighboring states.
By putting obstacles in the way of America’s pipeline builders, politicians and activists are setting the stage for similar scenarios across the country. They ignore how interdependent each component of oil and gas production is as well as how quickly growth trends can be reversed. Above all, they ignore the good work safe infrastructure is doing: protecting our communities, preserving the environment, and supporting long-term economic growth. It’s time to rethink the attack on U.S. energy infrastructure developers.
Craig Stevens is the spokesperson for Grow America’s Infrastructure Now, a national coalition focused on promoting key infrastructure investments.