As policymakers consider who will be the primary driver of America’s future energy development and innovation – Washington or the private sector – consider:
- Oil and natural gas supplied 62 percent of the energy America needed in 2011 – and is projected by government to supply nearly 60 percent of U.S. energy demand in 2040.
- The oil and natural gas industry provided $545 billion to the U.S. economy in 2011.
- In just unconventional resources (shale and other tight rock), industry is expected to invest more than $5.1 trillion in cumulative capital expenditures by 2035. The industry could add 1.3 million new jobs in this sector by 2020 for a total of 3 million jobs supported – growing to 3.5 million jobs by 2035.
- Since 2000, the oil and natural gas industry has invested nearly $2.4 trillion in U.S. capital projects to meet growing demand for oil and natural gas. This includes innovations in enhanced oil recovery technologies, steam-assisted gravity drainage, 3-D seismic technology, refining and fuel enhancements and hydraulic fracturing/horizontal drilling – the innovation responsible for the ongoing revolution in energy production from shale.
- Since 1990, the industry has invested more than $252 billion toward improving the environmental performance of its products and facilities. Between 2000 and 2010, industry invested $71 billion in innovative technologies that reduced greenhouse gas emissions – more than the federal government ($43 billion) and almost as much as the rest of private industry ($74 billion).
We could go on, but the above underscore the leading role the oil and natural gas industry (private sector) has played in delivering reliable, flexible, affordable energy – energy that has been the mainstay of our economy and that’s largely responsible for our modern way of living. And will continue to be, based on industry’s record of developing the innovations needed to safely and responsibly keep America well-supplied in energy.
So, as policymakers weigh energy and innovation, these suggest an approach that empowers private investment in developing energies for America, as well as the means to get them. That was one of the takeaways from the National Journal’s event on “The New Economics of Energy.” Here’s what such an approach would include:
- A states-first posture on energy regulation, recognizing the effective oversight officials at the state level are providing. U.S. Sen. John Hoeven of North Dakota said that on energy Washington regulates “too much,” running the risk of discouraging investment instead of fostering it. The Keystone XL pipeline has been under federal review for more than four years – the wrong signal to those who might invest other needed infrastructure projects. More on this at the Free Enterprise blog.
- Recognition – again, as the numbers above show – that oil and natural gas development can drive economic expansion. As Hoeven said, America’s debt problem requires economic growth, and energy is a “tremendous opportunity” to stimulate that growth.
- More recognition – that innovation and greater energy efficiency are more likely to come from the private sector than Washington. Doug Egan, CEO of Competitive Power Ventures: "You don't need government programs to incentivize energy efficiency" from companies. The Heritage Foundation’s David Kreutzer said there’s a funding role for government in early research and development, versus subsidizing favored energy technologies.