American Energy Will Restore Prosperity, If We Let It
To be sure, America faces many tough cultural challenges ahead, beginning with fatherless households, failing schools, and violent crime. But economically and environmentally, the future could be so very bright, especially if we don’t allow liberal fear-mongering to carry the day.
You’d think that green activists would be in a better mood after the U.S., in 2012, met its Kyoto CO2 emissions targets proposed in 1997, even though the U.S. never even ratified the treaty. And energy-related CO2 emissions for the first six months of 2016 were the lowest since 1991, thanks to the amazing technological breakthrough of hydraulic fracturing. So where’s their deserved love for cheap natural gas that burns cleaner and emits less CO2 than coal?
As Washington struggles to balance our budget, pay down the debt, and make Medicare and Social Security solvent, Stephen Moore and Jackson Coleman have proposed tapping a “revenue jackpot” to restore American prosperity:
Thanks to the technological revolution that has made shale oil and gas a readily available asset, the United States is now sitting atop the biggest trove of recoverable energy of any nation in the world.
After carefully reviewing the best geological surveys, both from government and from private research groups such as the RAND Corporation, we estimate that by expanding energy development on federal lands the government could raise as much as $3 trillion in royalties, leases, and taxes over the next 25 years. That revenue would help reduce the budget deficit, pay for tax reform, and finance the infrastructure improvements that both parties say they support.
A pro-drilling energy strategy could also raise GDP by $150 billion a year and reduce the U.S. trade deficit sharply. The $200 billion Americans spend each year on imported oil could be cut to near zero within five years. The Institute for Energy Research estimates that as many as six million new trucking, welding, pipefitting, engineering, and construction jobs could be created. Most of these would be union jobs, and many would pay $60,000 to $100,000 a year. That would be more jobs than the entire employed workforce in Michigan and Ohio, combined.
It is hard to imagine any competing national policies that could deliver anything like this kind of economic dividend while also delivering badly needed government revenues.
Skeptics say this is pie in the sky. But think about what has happened already with American energy production thanks to the shale oil and gas revolution. From 2008-2015, oil and gas output shot up 75 percent. Thanks to game-changing drilling technologies including hydraulic fracturing, advanced mining techniques, horizontal drilling, seismic imaging, and CO2-enhanced recovery, America could, for decades to come, be the world’s largest supplier of oil and gas.
No, we’re not talking about drilling in national parks
Just to be clear: We are not talking about drilling in Yosemite or Yellowstone or, as President Obama once joked, next to the Washington Monument. Drilling would happen in areas not environmentally sensitive.
It’s worked in Norway
The “fiscal dividend” from drilling has worked in places to reduce taxes. Norway gets a huge percentage of its revenues from oil drilling. Alaska doesn’t impose a state income or sales tax because of the billions of dollars the state government receives from drilling.
Dedicate some of the huge new revenue to improve carbon recapture technology
[A]s shale oil and gas production have gone up, greenhouse gas emissions and other pollutants have gone down, thanks to the surge in natural gas as a clean, cheap, and reliable source of electricity. Still, it would make sense to dedicate a share of the trillions of dollars of revenue gains from drilling on federal lands to discovering ways to reduce the impact of carbon in the atmosphere, through innovations such as carbon recapture.
An energy policy can be designed in a way that helps pay for tax cuts, expands high-paying jobs, fuels growth, and protects the environment. If the president and Congress seize this $3 trillion opportunity to make America energy independent, it could be one of their greatest legacies.
Peter Zeller is Director of Operations at Center of the American Experiment.