Historians will view the early 21st Century as the time when America reversed its geographical energy deficit to become the world’s leading oil and natural gas producer. Human ingenuity, enabled by a private property-based, mostly free market system, is responsible, overcoming the federal policies of an opposition president.
The benefits for U.S. consumers are enormous: ample supplies, lower prices, and less risk from unstable oil-producing countries. But for many energy workers, the supply boom has been a bust. At least 100,000 U.S. energy workers have been either laid off or furloughed by companies that are fighting to stay profitable in times of low energy prices.
Here are three areas of needed reform.
Since 2009, the government has made less federally owned land available for energy development. As a result, oil and gas production on federal lands has declined by 11.3 percent. Conversely, drilling on state-owned and private land has increased by 57.4 percent.
Given the benefits that accrue from energy development—millions of jobs, tax revenues to federal, state, and local governments, and increased energy security—opening federal lands to drilling could increase economic growth substantially. The government owns and controls about 640 million acres of the country’s 2.27 billion acres, accounting for about 28 percent of the total. Much of it could contain large quantities of oil and gas that could be produced safely without harming the environment.
In fact, the environment could benefit by unlocking natural gas from U.S. shale formations. Natural gas burns more cleanly than coal and emits less carbon dioxide into the air. The government’s own data indicate that as natural gas consumption has increased, carbon emissions have declined markedly.
However, the government is not focusing on the benefits of natural gas. Rather it is poised to release more regulations that will discourage its production, including new federal hydraulic fracturing regulations which will be layered on top of existing state regulations.
According to the Groundwater Protection Council, the federal rules are unnecessary. A GWPC study that examined state regulations found federal rules would be “duplicative of state regulation, and ultimately ineffective because such regulations would be too far removed from field operations.” State agencies are more familiar with the hydrology, geology and characteristics of each locality and are better positioned to oversee energy development activities.
The federal government is going overboard on ozone. Although the standards set in 2008 have not been fully implemented, the government is finalizing tougher ozone rules that experts say will have little, if any, benefit to public health. They will have a huge impact on the economy, however, jeopardizing millions of jobs and costing the economy an estimated $270 billion per year.
“The economically prudent course would be to leave the current standards in place,” advises Jack Gerard, president and CEO of the American Petroleum Institute, noting that ozone levels have fallen by 33 percent since 1980.
Methane emissions from oil and gas production likewise have declined markedly, with emissions from fracked natural gas wells falling by 73 percent since 2011. Yet the government is proposing very stringent methane reductions which could slow even today's pared back gas production.
Methane is a valuable commodity that producers seek to capture and sell. They have every incentive to prevent methane from escaping into the atmosphere, and government data indicate the industry’s technological advances to this end are working well.
So why fix something that isn’t broken? It does not take a genius to understand that the above three areas are part of Obama's multi-front war on fossil fuels. The idea is to keep in the ground what Americans want to consume to continue the virtuous process of today's consumption for tomorrow's production.
For the anti-energy environmentalists, less is more, and greater expense is a social virtue. Most Americans, thankfully, disagree. Let’s hope the fringe policy of attacking success will evaporate with the next White House.
Bradley is CEO of the Institute for Energy Research and the author of several books on energy history and public policy.