The U.S. has the natural resources, the technology and the ingenuity to enable it to secure its position as an energy powerhouse for generations to come. This would not only give the U.S. greater leverage on the world stage, but it would strengthen the country’s domestic competitiveness and economic standing.
In the U.S., the oil and gas industry already supports 9.1 million jobs and accounts for roughly 7.5 percent of the country’s GDP, or about $1 trillion in economic output annually. With an energy policy that promotes the development of America’s vast energy resources, the U.S. could add up to 1.4 million new jobs and about $800 billion in cumulative government revenues from lease taxes, royalties and lease sales by 2030, according to Wood Mackenzie, the consultancy.
It is unclear, however, whether the country will reach its full energy potential. U.S. policies for years have created a framework that risks making energy less available and affordable.
Conservative estimates put the size of recoverable oil and natural gas resources in the waters around the U.S. at roughly 150 billion barrels. That is the equivalent of more than 40 years of Saudi Arabia’s production. In addition, federal government estimates suggest federal lands hold technically recoverable resources of roughly 116 billion barrels of oil and 650 trillion cubic feet of natural gas. That is enough oil to power over 65 million cars for 60 years and enough natural gas to heat 60 million homes for 160 years.
Even as lawmakers talk about stubbornly high oil prices and the need to decrease U.S. reliance on foreign oil, however, up to 85 percent of the Outer Continental Shelf in the U.S. has been declared off limits to development. And the industry continues to confront barriers to onshore access, due to reduced leasing, excessive litigation, inconsistent regulatory guidelines and other factors.
No matter where you look in the world – China and developing Asia, the Middle East, Latin America, Eastern Europe, or Africa – the development of affordable fossil fuels is at the top of the policy agenda. The rest of the world recognizes that reliable and affordable energy powers virtually every element of the global economy and it is competing vigorously to find and secure long-term supplies of energy – in all forms.
Without a coherent, rational U.S. energy policy, the U.S. will continue to be marginalized in the global competition for energy and find itself in even less control of its energy destiny than it already is.
The U.S. needs a fundamental reorientation of energy policy that puts economic objectives and economic security at its core. It must commit to promoting abundant and affordable energy by broadening access to resources, creating responsible and balanced tax policies and increasing efficiency and investments in R&D.
In short, the U.S. must move from limiting energy development to enabling it. Only then can a U.S. energy renaissance take hold.
The U.S. cannot afford to squander this opportunity. A stronger oil and natural gas industry would stimulate other sectors. The development of natural gas from shale in the Northeast, for example, has prompted a $650 million investment in a new steel plant in Ohio that will create pipe needed for natural gas production. And increased natural gas supplies create an economic incentive for the expansion of manufacturing and petrochemical industries. In fact, a PricewaterhouseCoopers report says that increased natural gas from shale production could lead to about 1 million more U.S. manufacturing jobs by 2025 due to the benefits of affordable energy and demand for products used to extract natural gas.
By removing barriers to the development of the U.S. oil and natural gas industry, the country would send a message to Americans that the country is serious about sustained economic growth. Growth is the last and best choice for economic revival. The U.S. can create such growth with an environment that allows the private sector to expand, to create jobs, to lift incomes, to generate more tax revenues and to regain its optimism about the future. With the stagnant economy and high unemployment a key focus for many Americans, that is an important message for the U.S. to send.
This article is written by Chevron and not by the Quartz editorial staff.