An Opportunity for Energy Leadership | Commentary
Jobs and the economy are still voters’ top priorities by far. So it’s no wonder congressional candidates spent so much time on the campaign trail positioning themselves as champions of the American energy resurgence. The oil and natural gas industry supports 9.8 million American jobs, contributes $1.2 trillion to the U.S. gross domestic product and has spurred a manufacturing renaissance.
President Barack Obama has also joined the chorus, claiming in a recent speech at Northwestern University that America is a world energy leader because “right off the bat” his administration “upped our investments in American energy.”
In reality, we’ve become the world’s leading natural gas producer and soon-to-be leading oil producer despite, not because of, White House policies.
If President Obama has a signature energy policy, it is delaying the Keystone XL pipeline for six years. And the squandered energy opportunities don’t stop there. Eighty-seven percent of federal offshore acreage is off limits to energy development after the president reinstated a drilling ban that had been lifted in 2008, and production is down on federally controlled lands — 6 percent for crude oil and 28 percent for natural gas. The outdated crude export ban remains intact, and we run the risk of losing our competitive advantage as the world’s leading natural gas producer due to the administration’s slow pace in approving natural gas export applications.
With the election behind us, Congress has a mandate to step into the energy leadership vacuum and move forward with pro-energy policies that will create jobs and grow the economy. Congress can take the first steps before year’s end by sending several bills with strong, bipartisan support to the White House. These include a Senate-approved measure to help Bureau of Land Management field offices process drilling permits, a House-passed measure accelerating liquefied natural gas exports, and long-delayed legislation to get construction started on the Keystone XL pipeline.
Polls show 77 percent of American voters support increased production of America’s oil and natural gas resources, and increasing access to onshore and offshore resources is an economic winner. Removing obstacles to energy development could create 1 million American jobs, generate $127 billion in government revenue and increase oil and natural gas production as much as 4 million barrels per day over the coming decade.
Voters also overwhelmingly support moving forward with the exhaustively studied Keystone XL pipeline. After five positive environmental assessments from the State Department, President Obama’s failure to grant approval is the only barrier to building the pipeline, which would create 42,000 jobs right away during the construction phase, plus deliver 830,000 barrels of oil per day from Canada and the U.S. Bakken region to U.S. refineries — moving us closer to true energy security in North America — as impossible as it may seem to Americans who lived through the ’70s oil embargo.
The fact is, we’ve moved from energy scarcity to abundance, and government policy should reflect that. Nowhere is the disconnect between policy and reality more evident than in the issue of exports. The ban on crude exports was enacted in 1975 during a time of crisis, and it no longer makes sense. Studies show lifting the ban could add up to 300,000 jobs to the U.S. economy and reduce the trade deficit by $22 billion by 2020, and save American consumers an average of $5.8 billion per year due to lower gasoline, heating oil and diesel fuel costs. A new Brookings Institute study finds that crude exports could decrease gas prices by 7 cents to 12 cents per gallon.
Meanwhile, the U.S. Energy Information Administration just issued another report affirming that liquefied natural gas exports would lead “to higher economic output, as measured by real gross domestic product (GDP), as increased energy production spurs investment.” ICF International estimated that natural gas exports could support up to 452,000 new U.S. jobs.
Bringing export policy into the 21st century also adds a crucial tool to America’s diplomatic arsenal. Energy policy is foreign policy, as world events remind us every day. Our European allies are clamoring for U.S. energy to help break their reliance on Russia, on which several Eastern European nations depend for 70 to 100 percent of their natural gas.
In addition to the geopolitical leverage, a Department of Energy study found that exporting a portion of our abundant LNG resources could advance the president’s global climate goals. By providing an affordable alternative to more carbon-intensive fuels, U.S. LNG exports can reduce full-lifecycle electricity emissions by 42 percent overseas — just as greater availability of cleaner-burning natural gas has helped drive U.S. carbon emissions to near 20-year lows.
We know which energy policies are needed to create jobs, reduce the trade deficit, enhance energy security and expand America’s geopolitical influence. With our energy resources and technology, the United States has an opportunity few nations ever get. By seizing it, Congress can bypass White House obstruction and secure America’s future as an energy superpower.
Jack N. Gerard is president and CEO of the American Petroleum Institute.