Moving Beyond a Give-and-Take Energy Policy

Mark Green
Posted August 25, 2015

Earlier this year at the U.S. Energy Information Administration’s (EIA) annual conference in Washington, ClearView  Energy Partners’ Christine Tezak described the Obama administration’s energy policy as “give a little, take a little,” further characterizing it as “transitioning from scarcity to adequacy.”

It’s accurate. Handed a generational opportunity by America’s energy revolution to advance U.S. economic and security interests, the administration has responded by alternately embracing oil and natural gas development (in limited ways) and working to corral it. Given the chance to build a comprehensive, long-term energy strategy to carry the United States safely into mid-century, the administration has played “small ball” on the energy development side while unleashing a flood of unnecessary, self-limiting proposals largely untethered to scientific and economic analysis. Here’s what we mean.

In an interview with reporters this week, White House senior climate adviser Brian Deese talked about the administration’s decision to allow energy exploration in the waters off Alaska and the role of oil and natural gas overall. The Hill reports:

He (Deese) also defended oil drilling in general, saying that expanded American oil and gas production is a necessary part of the “transition” from fossil fuels to renewable energy. “When it can be done safely and appropriately, U.S.-produced oil and natural gas is important, and domestic production has energy security benefits over importing those fuels,” he said. “When it can be done consistent with the highest safety standards, that is going to be our focus.”

We largely agree. More than “transition” fuels, oil and natural gas, safely developed, are strategically important to the United States – to its economy and security – given federal projections that the two, which supply 63 percent of the energy America uses today, will supply 62 percent of our energy in 2040.

Now switch to President Obama’s speech in Nevada this week. The Hill reports:

Speaking at a clean energy summit in Las Vegas, Obama dismissed energy interests that oppose his push to green the energy sector as “naysayers” who are “backed by fossil fuel interests … Obama’s speech — and his confrontational tone toward the fossil fuel sector and it supporters — comes as he pushes to overhaul the American electricity sector, both by encouraging more renewable energy around the U.S. and instituting regulations to crack down on carbon emissions.

We’re not sure who the president is referring to, because our industry is leading the way in greenhouse gas emission-reducing technologies, devoting an estimated $165.4 billion (including shale gas investments) to those technologies from 2000 through 2012. That’s more than the rest of private industry combined ($91.2 billion) and more than double the federal government ($79.7 billion). Investments include advanced vehicle technology, fuel substitution, efficiency improvements, wind, biofuels and solar.  

Concerning is the “confrontational tone” noted by The Hill. It’s certainly seen in a wave of unnecessary regulatory moves and policy positions that could hinder energy that’s foundational to our economy and way of life – today and tomorrow – recognized earlier this year by the president’s own Council of Economic Advisers. Unfortunately, the administration seems out to blunt an energy revolution that has let the United States become the world’s No. 1 producer of oil and natural gas, according to EIA.

There’s EPA’s proposal for more restrictive ozone standards, even though existing standards are making our air cleaner and will continue working if left in place. The proposal, which would be virtually unattainable in many parts of the country, could become the costliest regulation ever – potentially costing the economy $270 billion per year on average from 2017 through 2040 and an annual loss of 2.9 million job equivalents, according to a NERA Economic Consulting study.

There’s EPA’s plan to regulate methane emissions from natural gas development, even though EPA’s own data reports emissions from hydraulically fractured natural gas wells fell 79 percent from 2005 to 2013.

There’s the Bureau of Land Management’s initiative for a new layer of fracking regulation, even though states already have effective oversight regimes in place, tailored for the specific geology, hydrology and other characteristics.

There’s the flawed Renewable Fuel Standard, with its mandates for increasing ethanol use, which could result in fuel disruptions that could do harm to the economy and individual consumers, according to a separate NERA study.

There’s the administration’s policies that continue to keep 87 percent of federally controlled offshore reserves off limits to energy development. While the government conducted an oil and natural gas lease sale for the Western Gulf of Mexico last week, access in other offshore areas continues to be denied.

Expect to hear more from the president on energy and climate during stops this week in Louisiana and next week in Alaska. The fact is both states have benefited by embracing safe energy development. We should hear about industry-led offshore safety improvements, including the Center for Offshore Safety and its lead role in establishing a systems approach to safety.

America needs an approach to energy more robust than “transitioning from scarcity to adequacy.” Our energy revolution, built on American innovation, entrepreneurship and investment, has provided a grander opportunity than that. In this energy age, the United States is an energy superpower, and its citizens are entitled to more than mere adequacy – in terms of economic prosperity and national security. API President and CEO Jack Gerard in January:

“America’s emergence as a global energy leader has fundamentally reordered the world’s energy markets, by elevating the importance of North American energy production and reducing what had been the dominant roles of OPEC and Russia. And if we get our energy policy right, this unique American moment could support millions of well-paying jobs and expand the participation of traditionally underrepresented groups, which will be critical to fulfilling our nation’s bright energy future.”