Sustaining U.S. Energy Through Right Policies

Mark Green
Posted July 31, 2018

U.S. Energy Secretary Rick Perry makes a number of important points about domestic natural gas and oil production, hydraulic fracturing and U.S. energy exports in a piece for CNBC:

• The United States is shedding dependence on imported energy.
• U.S. energy exports are helping friends and allies overseas.
• Natural gas is helping the U.S. lead in cutting greenhouse gas emissions.

Perry notes that thanks to technologically advanced hydraulic fracturing and horizontal drilling, the U.S. has become the world’s leading natural gas producer:

Spurred by technological breakthroughs unleashed by innovation, deregulation and pro-growth policies, we are now producing energy more abundantly and affordably, using it more cleanly and efficiently, and obtaining it from a wider range of sources than anyone ever thought possible. Gone are the days of America's crippling dependence on foreign energy sources. True energy independence is finally within our grasp and we are exporting more of our energy to our allies. Nowhere is this stunning turnaround more dramatic than with natural gas. Thanks to significant innovations in hydraulic fracturing and horizontal drilling, the United States is the number-one natural gas producer in the world.

Perry writes that unlocking natural gas and oil reserves by safely using hydraulic fracturing has boosted the national economy and our country’s energy security. More infrastructure is needed to fully capitalize on this energy wealth:

Natural gas production has created over 150,000 jobs across the nation. And as domestic production continues to increase, and natural gas prices remain low, our economy reaps the benefits. American families enjoy a lower cost of living, and our businesses see reduced operating costs, make greater investment, and increase employment opportunities.

Increased use of natural gas has allowed the U.S. to reduce carbon dioxide emissions 14 percent from 2005 to 2017, Perry writes. The U.S. has been able to grow its economy and protect the environment at the same time, while creating a new opportunity to advance global energy security:

[W]hat has worked for us can work for the world. The increased availability of American LNG will contribute to global energy security, providing more options for the world's energy consumers. For too long, Russia has enjoyed near-monopoly status as the main supplier of natural gas to our European allies, and wielded that power as a means of political coercion. Simply stated, the United States wants to help our partners increase their energy security by increasing the diversity, not only of their supply, but of their suppliers as well. Now that America is exporting natural gas, we stand ready, willing, and able to be a reliable and competitive source of energy diversity and security for our trading partners.

As we say, Perry sums up the benefits of the U.S. energy renaissance. The renaissance and its benefits can be sustained and expanded with the right federal and state policies – and rejection of anti-energy proposals, such as a move to significantly restrict natural gas and oil production in Colorado, the nation’s fifth-largest natural gas producer and seventh-largest oil producer.

According to an assessment by the Colorado Oil and Gas Conservation Commission (COGCC), under Initiative 97, 85 percent of private and state-owned land would be made off limits for natural gas and oil development by a 2,500-foot setback provision designating buffer zones around occupied structures and “vulnerable” areas. In all, including federal lands, more than half of the state of Colorado would be made inaccessible for new natural gas and oil development. In Colorado’s top five natural gas and oil producing counties, 61 percent of the total surface area — a whopping 94 percent of the non-federal land in those counties— would be inaccessible.

At the recent State of Colorado Energy event in Denver, Sec. Ken Salazar, who led the Interior Department under President Obama, said the initiative reflected both population growth into areas that used to be rural and a national policy agenda that calls for ending the use of natural gas and oil:

“You have people who have taken the position that the only thing that can happen is you leave it in the ground and that’s how you address the issue (climate). I don’t think that’s the case at all. If you take those positions you end up sacrificing the very policy imperatives that I was speaking about (increased U.S. energy security).” 

Colorado’s economy could be severely impacted – a new study estimates Initiative 97 would eliminate more than 100,000 industry jobs and more than $1 billion in taxes paid to the state. It’s the wrong path for Colorado’s economy and the state’s ability to continue as a leading energy producer.

We agree with Perry that the U.S. energy renaissance is creating a new era of opportunity and optimism for our country, on multiple fronts. At the same time, let’s all recognize that a robust domestic energy picture isn’t automatic.

It requires supportive policies – increased access to reserves onshore and offshore and smart, efficient regulation, as well as resolve to steer clear of unforced errors, such as Colorado’s Initiative 97, that unnecessarily hamstring the safe, responsible natural gas and oil production that benefits us all.