The United States is fast becoming the world's dominant energy provider and should make it a national priority to pursue this opportunity vigorously. At stake are vast economic and foreign policy benefits.
Hydraulic fracturing and horizontal drilling, the innovations behind our shale revolution, have been the catalysts for America to become the world's largest producer of natural gas and petroleum since 2013. For the decade 2007-16, U.S. crude oil production rose 75% to 8.9 million barrels a day. Over the same period, marketed production of natural gas rose 40%, to 78.7 billion cubic feet per day.
America remains a net importer of energy, but perhaps not for long. In its January 2017 Annual Energy Outlook, the U.S. Energy Information Administration found that under most scenarios, the U.S. will be a net exporter of energy by 2026, the first time this has happened since 1953.
It will not be easy to go from being the leading producer of energy to being "energy dominant," which President Trump called for when addressing the U.S. Department of Energy on June 29.
Yet, major steps already are being taken. For example, tens of billions of dollars of private sector funds are being invested so that the U.S. can export liquefied natural gas (LNG) aggressively, one of many significant near- and long-term export opportunities.
Achieving energy dominance has many important benefits, including these seven:
Good paying, secure middle-class jobs. America's energy revolution has meant secure middle-class jobs. According to the National Bureau of Economic Research, 4.6 million jobs have been created from the shale boom. More can be generated as production increases and steps are taken to increase natural gas, oil and coal exports.
Lower energy costs are essential for reviving U.S. manufacturing. Higher production has also meant sustained lower prices for energy. With electricity one of the highest variable costs that many U.S. manufacturers need to address, sustained high U.S. energy production and corresponding lower energy prices are essential for reviving the manufacturing sector.
Catalyst for U.S. infrastructure development. With higher levels of domestic energy production and the opportunity to export some of this energy, there will be new pipelines and expanded energy infrastructure. This will ensure lower prices and more reliable supplies to many areas.
An improving trade balance. Expanded domestic energy production reduces the need to import oil, especially from the Middle East, and increases exports. This will improve America's balance of trade while keeping billions in America for capital formation and related investments.
Meeting the world's growing demand for energy. As India, China and other nations grow, they will be needing more energy. If America does not provide this energy, it will be left to other nations. In some cases, our adversaries will be strengthened.
Helping the world's poor. Today, 1.3 billion people worldwide have no electricity. Many are forced to burn dung and refuse — very dirty and unhealthy fuel sources. Higher energy production raises the likelihood that these people will have the energy necessary to help build a cleaner, more dignified life.
Peaceable way to strengthen America's global influence. The U.S. has begun selling LNG to Poland and is pursuing this with China as well. By becoming a partner with countries on their energy needs, America's influence abroad is strengthened. We also reduce the likelihood that we will ever have to go to war over vital sources of foreign energy.
It is also clear that expanded production of U.S. natural gas and oil can correspond with lower carbon emissions and a better environment. During the first five years of the shale revolution, from 2007-12, the U.S. reduced its carbon emissions by 14% and its per capita emissions by 20%, to reach the lowest levels since 1991. And emissions have remained at these levels in recent years.
Car pollution also has fallen dramatically. The EPA documented that "compared to 1970 vehicle models, new cars, SUVs and pickup trucks are roughly 99% cleaner for common pollutants (hydrocarbons, carbon monoxide, nitrogen oxides and particle emissions)."
Power plants also have become more-efficient, cleaner electricity generators. For example, natural gas power generation transitioned to more efficient combined-cycle technology. Turbine manufacturers are also continually seeking ways for the units to run hotter and longer, increasing the thermal efficiency and reducing emissions.
Energy dominance will strengthen America economically, providing jobs and opportunities for many, while strengthening our position and standing in the world. Success will not be easy or guaranteed, but it is worth pursuing, especially given the recent benefits of expanded domestic energy production. We should take all steps necessary and prudent to embrace this promise and enormous long-term opportunity.
- Steidler is a senior fellow with the Lexington Institute. He has researched and written about energy issues for 15 years. For related information visit http://www.lexingtoninstitute.org and follow it at @LexNextDC and @EnergyLexington.
