How to Make Energy a Priority in President Obama’s Second Term

Dec 31, 2012

An oil drilling rig on the Bakken formation in Watford City, North Dakota. Photographer: Matthew Staver/Bloomberg.

Over the weekend, President Obama laid out some priorities for his second term. One of them is energy:

You know, we've got a huge opportunity around energy. We are producing more energy and America can become an energy exporter. How do we do that in a way that also deals with some of the environmental challenges that we have at the same time?

Big things are happening because of energy. Economist Mark Perry notes how the shale gas boom is making the U.S. a very tempting place for new investments in steel and plastics production. An IHS study cosponsored by the Chamber found that shale energy has created 1.7 million jobs and is expected to create 3 million by 2020. IHS also study broke down how every state, energy-producer or not, is benefiting from more jobs.

The President can’t simply talk about supporting the energy boom (or take undeserved credit for it). To maximize the job and economic benefits of energy, the administration has to put good policies in place. Here are four places to start:

1.    Lay off hydraulic fracturing. This decades-old technology is one of the technological seeds of the shale energy boom. Vast amounts of oil and natural gas that were once unavailable are now being produced in North Dakota, Texas, Pennsylvania, and elsewhere because of hydraulic fracturing, horizontal drilling, and the computing power to analyze huge amounts of geologic data. The administration’s pile of studies and rules on hydraulic fracturing only duplicates the work of state regulators, adds needless red tape, and retards development.

2.    Get the Energy Department to approve liquefied natural gas export permits. A recent study estimates that under every scenario, the U.S. economy would benefit from selling domestic natural gas on world markets.

3.    Don’t stymie coal exports. Just because this administration has a distaste for reliable electricity production from coal and is pushing regulations to shut down coal-fired power plants, it doesn’t mean other countries like India and China will stop using coal. Like exporting LNG, America will gain from exporting coal. EPA has already tried to prevent the Army Corps of Engineers from permitting new coal export terminals, and it would be wishful thinking to assume EPA will surrender after an initial setback. 

4.    Approve the Keystone XL pipeline. This energy infrastructure project would create 20,000 thousand jobs, add $6.5 billion is American’s personal income, and generate billions in new revenues for cash-strapped state and local governments.

The potential of energy to create jobs, economic growth, and government revenues is so great that U.S. Chamber President and CEO Tom Donohue suggests, it should be part of a “Big Deal” for fixing our massive fiscal problems. Over the coming weeks, the U.S. Chamber’s Institute for 21st Century Energy will be issuing its detailed recommendations to make America more energy secure and boost the economy.  Hopefully, the administration will take notice.

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