A giant clothespin representing the U.S. economy chokes Uncle Sam during a Reopen America rally in Stuart, Florida, on Friday, April 24, 2020. (Photo by Joe Kovacs)
[Editor's note: This story originally was published by Real Clear Energy.]
By Jude Clemente
Real Clear Energy
Through the worst public health crisis in many decades, it has been a devastating seven months for the U.S. economy. But hope is emerging: September unemployment was at 7.9%, down from 14.7% in April. Even better, U.S. Energy Secretary Dan Brouillette recently stated that the U.S. oil and gas industry, which leads the world in production, should be a primary vehicle for our recovery from the pandemic-driven economic fall.
So why would Joe Biden and Kamala Harris propose energy policies that are (1) a direct threat to U.S. security, (2) morally unjust, (3) against climate change goals, (4) bound to up energy prices, and (5) sure to put millions of Americans out of work?
The flip-flopping may continue but the past cannot be changed:
- “Kiddo…Look in my eyes. I guarantee you we’re gonna end fossil fuels,” Biden was filmed telling a voter.
- “There’s no question that I am in favor of banning fracking,” Harris told a ClimateTownHall.
Struggling through such an extraordinary time, where demand and prices have both unexpectedly plummeted, 2020 has been perhaps the most difficult year in the history of the U.S. oil and gas industry. Yet we have no choice but to rebound. Oil and gas meet 65% of America’s energy demand and remain simply irreplaceable at scale. So much so, that a lack of investments in new supply today could easily begin to spike prices in just a few years as demand inevitably rebounds: “$190 Oil? J.P. Morgan Thinks It's Possible.”
In the fracking and shale-era from 2008-2019, for instance, U.S. crude oil production was up 160%, and gas increased 70%. Fracking now accounts for 80% of our oil and gas output and has transformed the U.S. into an energy powerhouse, producing more oil than Saudi Arabia and more gas than Russia.
Banning fracking would also make it nearly impossible to export oil and gas. In 2019 alone, the U.S. exported over 3 million b/d of crude oil and increased gas exports by almost 25%. From basically nothing in 2016, the U.S. is now the third largest exporter of liquefied natural gas (LNG), deemed the fastest growing commodity in 2019 – and essential to net-zero goals. This explains why the U.S. Department of Energy projects: “global natural gas consumption increases more than 40% between 2018 and 2050.”
America’s oil and gas exports mean rising economic prosperity, but perhaps most importantly we can now help meet the desperate needs of energy-poor nations across the world.
(1) Security – a fracking ban puts our energy future in the hands of OPEC and Russia, a bloc of countries now actively collaborating to dominate global supply. The U.S. is widely expected to account for the bulk of new oil and gas output. We must avoid at all costs the Hari-Kari energy policies in Massachusetts that have forced the state to import LNG from U.S.-sanctioned Russia in recent winters. It is fracking that will keep the U.S. a net energy exporter through 2050. No wonder then: “America Just Witnessed A Miracle — Energy Independence” and “The U.S. Oil Boom Is Sinking OPEC Imports.”
(2) Economic Justice – here at home: “Natural Gas Can Help Advance Communities of Color.” Globally, U.S. LNG exports are crucial to help lift billions of people out of abject poverty while also lowering greenhouse gas emissions. Some three billion people rely on such biomass as wood and dung for heating and cooking, creating indoor air pollution that kills around four million a year and causes a wide range of non-communicable diseases. The UN reports that over 17,000 children die every day from preventable causes, enabled by a lack of modern energy. It is a moral imperative for the U.S. and other energy-rich nations to share their abundant resources with those still stuck in the backwater of human advancement.
(3) Climate Change – President Obama supported natural gas to cut emissions while also backing up the natural intermittency of wind and solar power. Today, gas accounts for 45% of U.S. generation capacity and is projected by the U.S. Department of Energy to add another 235,000 megawatts in new capacity through 2050, eight times more than wind and a third more than solar. More natural gas has been cited by our OECD energy advisor, the International Energy Agency, as the main reason why the U.S. has been reducing emissions the fastest in “the history of energy.”
(4) Energy Prices – the U.S. Chamber of Commerce finds that with a ban on fracking, gasoline prices would almost double within five years, families would pay twice as much for electricity and natural gas prices would rise 400%. This would lead to a cost-of-living jump of nearly $4,000 a year while incomes would drop significantly. The U.S. Department of Energy forecasts that natural gas prices, for instance, will remain below the low $3.70 per MMBtu mark all the way through 2050. For reference, from 2000-2008, before our fracking revolution took flight, prices averaged over $6.00.
(5) Jobs – the Chamber also concludes that a fracking ban would destroy over 19 million jobs from 2021-2025 while slashing $7.1 trillion in GDP, as the multiplicative impacts of no drilling bring devastation to America’s economy. Further, the lost opportunity costs would block future economic growth and employment. IHS Markit has estimated that fracking will create nearly two million additional U.S. jobs from 2017-2035. In addition, fracking jobs are extremely high paying jobs: “The highest-paying college major? Petroleum engineering.”
No country ever has abandoned a natural resource of shale’s proven worth. Fracking is expected to account for virtually all of our new domestic oil and gas supply for decades to come. While wind and solar continue to grow, the recent blackouts in green-fixated California clearly show that they are nowhere near ready to go it alone. Renewables, of course, are strictly sources of electricity, a sector that accounts for less than 40% of total U.S. energy consumption. Critically, this means that wind and solar do not even compete in the majority of ways in which we consume energy, making their ability to extend market share in the immense U.S. energy complex inherently limited.
Indeed, still perhaps the most telling headline of them all: “Putin's Other American Propaganda Effort: Anti-Fracking News.”
Jude Clemente is Editor at RealClearEnergy.
[Editor's note: This story originally was published by Real Clear Energy.]
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