For decades, Americans have lamented their dependence on foreign energy, especially Middle East oil. Now, however, the tables are turning. Growing numbers of analysts are concluding that within a decade, America could become the world’s top energy producer.
That would certainly be desirable. But that future is far from guaranteed. We have the entrepreneurship and technological innovation we need. The question is whether we’ll have the smart public policies that allow them to flourish. While America’s energy prospects have never been brighter, regulators have never been more vehement in their push for restrictive controls on development of new projects.
There are three obvious places to start with reform.
First, regulators need to ease restrictions on hydraulic fracturing.
“Fracking” uses water pressure to extract oil and natural gas from shale formations buried deep under the earth’s crust. Most of the environmental concerns over fracking, which turn on possible groundwater contamination, are based on misinformation or a misunderstanding of the process. Over 1.2 million wells have been successfully fracked. In other words, fracking presents very little environmental risk. By some estimates, natural gas development in the Marcellus alone would create over 100,000 new jobs.
The second major way federal regulators can promote American energy is to open up off-shore energy reserves for drilling. After the tragic Deepwater Horizon spill, the Interior Department instituted a rigid drilling moratorium that effectively halted offshore development. Eventually, the courts forced regulators to ease the ban, but there is still a great deal of uncertainty.
Since the moratorium was announced, eleven major ocean drilling operations have closed shop, destroying an estimated 91,000 jobs.
Finally, the Obama administration needs to grant approval for the construction of Keystone XL – – a proposed pipeline that would carry oil from Canadian shales to refineries in Texas.
The constructing and maintaining the pipeline will create 130,000 new jobs.
It is indeed possible for the U.S. to become the world’s premier energy producer by 2020, But reaching that goal requires policymakers to identify and eliminate regulatory barriers that are keeping America from achieving its astounding energy potential.