You Didn’t Build That, Mr. President

Mark Green
Posted October 3, 2014

Here’s the president, lauding the lift America’s domestic energy revolution has provided the nation’s economy in a speech this week in Illinois:

“The first cornerstone is new investments in the energy and technologies that make America a magnet for good, middle-class jobs. So right off the bat, as soon as I came into office, we upped our investments in American energy to reduce our dependence on foreign oil and strengthen our own energy security.  And today, the number-one oil and gas producer in the world is no longer Russia or Saudi Arabia.  It’s America. For the first time in nearly two decades, we now produce more oil than we buy from other countries.  We’re advancing so fast in this area that two years ago I set a goal to cut our oil imports by half by – in half by 2020, and we’ve actually – we will meet that goal this year, six years ahead of schedule.” 

It’s good to hear the president talking about the benefits to America of resurgent oil and natural gas production here at home. He’s right: The United States is the world’s No. 1 producer of natural gas and is poised to be No. 1 in oil production. He’s also right that this domestic output has cut imports significantly, putting America on a path to zero net imports in the foreseeable future – a good benchmark for something everyone wants: genuine U.S. energy security.

Now let’s talk plainly.

These energy developments and their benefits have occurred without much help from this White House. They’ve happened even as the president’s actions and those of his administration have fallen well short of his “all-of-the-above” rhetoric on energy.

Indeed, the president laying claim to making energy investments, increasing oil production and reducing oil imports – “we upped our investments” and “we now produce more oil than we buy from other countries” – is a lot like the sports fan sitting in the stands with his popcorn, taking credit for what’s happening on the field.

To be clear, this administration has allowed private industry to invest in and develop the new technologies and methods to launch America’s transforming energy renaissance – safely tapping vast reserves of oil and natural gas in shale and other tight-rock formations using advanced hydraulic fracturing and horizontal drilling. The administration also has let industry continue to market the fuels and other refined products consumers want – so far.

It didn’t build the energy revolution, but, thankfully, it has managed not to stop it. API President and CEO Jack Gerard:

“We appreciate the president once again acknowledging the economic success that has been driven by America’s oil and natural gas industry. As he noted, oil imports have been cut in half and rising natural gas production is revitalizing manufacturers while reducing carbon emissions to near 20-year lows. But let’s be clear – our energy renaissance has occurred despite White House policies, thanks primarily to the support of private investors and state governors who have worked diligently to support new development.”    

Industry shares the president’s desire to create jobs that “provide meaningful work” and give Americans a “sense of purpose.” Industry agrees with the president that job creation needs to accelerate and that wages need to grow.

Here’s what this administration can do: Resist the impulse to get in the way of America’s energy renaissance, which is creating industry jobs that pay, on average, about seven times the federal minimum wage.  It is creating employment in industry’s sprawling supply chain as well as in other sectors of the economy. Gerard:

“The president said that ‘job growth could be so much faster, which would drive up wages.’ We could not agree more – which is why our energy policy should match the all-of-the-above rhetoric we hear from the White House.”

The administration can increase access to domestic energy reserves onshore and offshore by leasing more areas under federal control, reversing the slide in oil and natural gas production on federal lands from 2009 to 2013, noted by a recent Congressional Research Service report. It can streamline the federal permitting process for drilling and weed out red-tape regulatory obstacles to safe and responsible development.

The administration can let privately-financed energy export projects go forward so that American liquefied natural gas (LNG) can claim a share of the developing global market that befits the world’s No. 1 producer. It can lift America’s anachronistic, self-hindering ban on crude oil exports – which, along with LNG exports, would stimulate more domestic production and economic growth while bringing overseas wealth into this country. It can back repeal of the counter-productive Renewable Fuel Standard and its potentially harmful mandates requiring ever-increasing ethanol use. Gerard:

“Washington should recognize that energy can be a key to raising incomes and lowering costs for American families. … By turning aside duplicative regulations, opening the door to U.S. energy exports, and eliminating counterproductive fuel mandates, we can create millions of new jobs and achieve a new era of energy security.”