American Energy Security and Innovation
When it comes to America’s energy outlook, the paradigm has shifted. We are in the midst of an energy revolution brought about by the development of new technologies and innovations that allow us to harness our vast resource base in ways that were unthinkable even a few short years ago.
As policymakers, our job is to ensure America can take full advantage of our nation’s valuable resources by unlocking the power of our innovators and entrepreneurs. The committee has embarked on a path to explore this new era of American energy abundance and rapid technological innovation. The ability to continue to successfully unlock these resources will lead to increased American prosperity and less energy imports from geopolitically unstable regions of the world—ensuring generations of affordable, reliable energy for consumers.
The largest threat to this path of security continues to be ever increasing regulations that unnecessarily limit or impede the safe and responsible production of our energy resources and stifle the ability to maintain a diverse electricity generation portfolio. It is fundamentally unfair when onerous federal red tape keeps energy prices high for hard-working Americans and the least fortunate among us who need affordable gasoline and electricity. Regulations that narrow our energy choices or entangle states and businesses in unnecessary red tape should be revisited to ensure they are protective of both public health and the environment and economic growth and job creation. This paper examines a series of specific policy solutions for American energy security and innovation.
Solutions for Consumers: Unlocking Abundant, Affordable American Energy Resources
1. Approve the Keystone Pipeline to Provide Energy Security and Jobs
Energy security is vital for a growing economy and to attract new businesses to the United States. Canada’s growing oil production holds the potential to provide the U.S. with a much-needed additional energy supply from a reliable ally and trading partner. However, unless we expand the existing pipeline system linking the two countries, we will be unable to take advantage of this opportunity. TransCanada, a Canadian energy company, has proposed the Keystone XL pipeline expansion project to carry nearly a million additional barrels of oil per day from Alberta to American refineries in the Midwest and Gulf Coast. The project would provide employment as well as energy – an estimated 20,000 direct and over 100,000 indirect jobs. While Keystone XL enjoys widespread public support and has been the subject of extensive environmental review and public comment, federal approval for it has been held up by the Obama administration for four years and counting. In the absence of executive action, it is time for Congress to step in and approve Keystone XL.
2. Reduce Volatile Gasoline Prices by Producing More Made-In-America Energy (and Domestic Alternatives)
While many in Washington were for years convinced America was running out of oil, entrepreneurs were busy proving them wrong. People like Harold Hamm, CEO of Continental Resources, were making investments and applying made-in-America innovations in directional drilling and hydraulic fracturing that have opened up abundant new oil resources in the U.S. As a result, domestic oil production has reversed its long decline and began rising in 2007. But we are doing it with one hand tied behind our backs. According to the Congressional Research Service, the entire increase in domestic oil production between 2007 to 2012 has come from private and state-owned lands, while production on federal lands – where Obama administration approval is needed – has actually declined. The same is true of domestic natural gas – a 40 percent increase on non-federal lands and a 33 percent decrease from federally-controlled onshore and offshore areas. Nearly every step of the approval process on federal lands has been made more difficult under President Obama than under his predecessors, Republican or Democrat. In order to realize the full potential of this domestic oil and natural gas renaissance, Congress needs to restore a reasonable and balanced approach to permit drilling on federal lands.
3. Support a Manufacturing Renaissance
The domestic natural gas resources that have been unlocked through new technologies and innovation are revitalizing many sectors of American manufacturing. The high prices of natural gas in the recent past had contributed to the outsourcing of the production of chemicals, fertilizer, paper, and other natural gas-dependent manufacturers. But thanks to the plentiful and affordable natural gas supplies now coming online, those manufacturers and other industries as well – and their jobs – are coming back. Energy expert Daniel Yergin of IHS CERA estimates that the natural gas and oil boom already supports 1.7 million jobs, and projects as many as 3 million jobs by 2020. Though hydraulic fracturing has been successfully regulated at the state level, some in Washington would like to see a federal crackdown on it. Congress needs to prevent this overreaching regulatory agenda, to maintain access to low-cost natural gas supplies, which helps to support new manufacturing and investment on our shores.
4. Ensure Access to Affordable, Reliable Electricity
Restoring job growth and economic recovery will require access to affordable, reliable sources of electricity generation. Fuel diversity is essential if we are to continue to have access to the low-cost, dependable electricity supplies needed to run our economy, businesses, and households, and to be resilient to future weather events and natural disasters. While our homes and businesses have historically had access to affordable, diverse, and reliable electricity, even as our nation’s air is cleaner than it has been in decades, President Obama and his administration have sought to limit fuel diversity and increase the price of electricity through a suite of new power sector regulations. Congress should support a truly “all-of-the-above” approach for the nation’s electricity generation portfolio, and should oppose regulatory actions that will prevent fuel diversity, drive up energy prices, and restrict access to affordable, reliable electricity. This all-of-the-above approach includes the use of coal, nuclear, natural gas, and renewables.
5. Promote U.S. Exports of Energy Technologies and Supplies
During our February 5, 2013, hearing that examined North America’s energy resources, Dr. Daniel Yergin testified, “For decades, the United States has made the free flow of energy supplies one of the cornerstones of foreign policy. It is a principle we have urged on many other nations.” At this time, however, too many regulations and regulatory procedures enforced by a range of federal agencies, including the Department of Energy, Department of Commerce, and Federal Energy Regulatory Commission, create regulatory uncertainty and de facto barriers that have restricted U.S. companies from being able to sell energy supplies on the international market. Given that the United States has the world’s largest recoverable reserves of coal and increasing supplies of recoverable oil and natural gas, Congress should work to reduce barriers and bring more regulatory certainty to U.S. energy exports, which would promote economic growth here at home and help ensure that the U.S. is a leader in innovation in the energy sector. Allowing more exports would also reduce our problematic trade deficit and better align our domestic policy with our foreign policy while beginning to reduce the control of energy resources by geopolitical unstable regions of the world.
6. Evaluate the Impacts of New Regulations on American Jobs and Consumers
Consumer spending drives the U.S. economy. Even as American families and businesses face fiscal challenges and rising costs and taxes, however, President Obama and the administration have issued numerous new regulations that impact jobs, households, and consumers by increasing the costs of energy, transportation, and goods and services. Frequently, these regulations are developed without a full analysis of the impacts on American jobs and on consumers. Congress should encourage greater public disclosure and consideration of new regulations that will impact jobs, household incomes, and consumers and their pocketbooks.