Washington dragging its feet on gas production is a drag on job creation

At a time when every nation in the industrial world is scrambling to create jobs, the United States government should send a clear signal that it intends to make our nation’s affordable energy available to spur economic growth.

For our national security, for growth in clean energy, and for our economy, it is imperative that policymakers end their lukewarm flirtation with natural gas, and get off the fence. With more than a 100-year supply of gas from U.S. shale formations, this newly accessible resource is a game changer and it’s time our leaders seized this opportunity.

Economic growth depends on affordable natural gas, and if supplies become tight due to over-regulation, prices will rise and jobs will be lost. Case in point: when the average price of natural gas rose 400 percent between 1998 and 2008, the job losses piled up quickly. Many industries faced three options: find more efficiencies, move factories, or shutter plants. With efficiencies largely in place, the second and third options became the only viable alternatives. Countless other manufacturing jobs were impacted.

The natural gas industry is responsible for 2.8 million jobs and $385 billion annually in economic activity according to a report by IHS Global Insight, commissioned by America’s Natural Gas Alliance. That number could grow substantially with the resources we have available, and tapping that resource will assure stable prices.

Ensuring production is critical if we are going to rebuild our nation’s manufacturing base. Often, when energy and jobs are discussed, the focus is on employment that is related to production. Forgotten is the fact that affordable natural gas is the foundation for much of our manufacturing base and that domestic production, both on- and off-shore is critical to this affordability. 

Hydraulic fracturing, the method used to extract gas from shale formations, has a very good track record over more than six decades and the clean air benefits are enormous. Gas is at least twice as clean as coal when used in power production, and at least a third cleaner than oil, when used for transportation and heating.

Today, thanks to policies implemented in the previous administration and the 2005 Energy Bill, including a timely permit review process and a regulatory environment supportive of exploration, natural gas production has rebounded. Shale gas fields have gone from being non-producing reserves in 2006 to supplying almost 10 percent of our gas. The price of gas now sits at one third of its peak, which is a direct reflection of production from shale gas reserves. One chemical company, which has been vocal about the importance of affordable natural gas in keeping its U.S. operations viable, now describes its domestic operations as very strong.

And this is not a temporary surge in natural gas production. In addition to our abundant onshore gas supplies, there are gas reserves sitting below the seabed of our east and west coasts that could be developed. However, as is the case with shale gas, the future of off-shore production is clouded by mixed signals from Washington.

Production is not just about our domestic industry. Global competitors such as Germany, China and India are ramping up their own production in order to maintain their economic competitiveness and security. Maintaining America’s energy independence is of critical importance to our national security, illustrated vividly in a recent LNG Journal headline, “Russian LNG meant for US is sold to India, China”.

Going forward policymakers, specifically Congress, must hold firm against those who would seek to roll back recent progress the nation has made regarding utilization of resources and positioning America to compete internationally as a world class gas producer. 

Time is of the essence. If we are to move forward, the following matters must be resolved in short order: conclude the debate on drilling risks; establish best practices for producing in non-traditional fields; allow for federal leasing to regain momentum lost from the recent moratoria for off-shore exploration; and resist attempts to over-regulate this industry.

A greater measure of energy security and greater stability of our energy economy is within our grasp. If America has an energy problem, it’s because we’ve done it to ourselves.

Mark Maddox is currently an energy expert with the American Action Forum and served in a series of senior positions at the U.S. Department of Energy in both Bush administrations.