Opinion

Ingenuity Key to Unlocking America’s Energy Potential

The White House recently announced its opposition to a bipartisan-backed bill passed by the House Energy and Commerce Committee that would end the nearly 40-year-old ban on crude oil exports. With the bill expected to pass the full House today, it’s important to remember that ingenuity, not ideology, is the path to a prosperous and more self-sustaining America.

Ingenuity in our energy sector, leading to tremendous operational growth and technological advancements, is why the United States is now the top producer of oil and gas globally. We cannot let partisan politics eliminate this continued growth and future opportunities. Instead, we must support bipartisan measures, including exports of American crude oil that ensure a stronger America.

The administration came out opposed to the bill because any decision to lift the crude oil exports ban, it said, rests with the Department of Commerce. This is misleading at best, as President Obama himself can repeal the ban which is the product of an executive order issued by President Richard Nixon in 1974.

But now, in 2015 our nation is in the midst of an energy renaissance. Thanks to new technologies, we’ve been able to tap energy resources from previously impenetrable sources, making the U.S. the top producer of oil and natural gas.   In fact, the U.S. produces more than nine million barrels of crude oil a day and currently has the highest crude oil inventories in 80 years.

Because of this abundance of energy, there is an excess of oil on the market, which could start a harmful domino effect throughout our economy: production could slow, oil rigs would close, energy development and infrastructure projects would be terminated. The bottom line? Thousands of long-term, good-paying jobs from coast to coast would be lost, leading to an economic storm that would hit communities and consumers across the country.

However, harnessing our nation’s amazing energy potential would deliver a multitude of opportunities.

A macroeconomic analysis conducted by IHS earlier this year shows that lifting the ban on crude oil exports is expected to add $26 billion to $47 billion to GDP and support 124,000 to 240,000 jobs per year on average during the 2016–30 period.[1]

Additionally, our nation’s minority communities—notably African-Americans and Hispanics—would also benefit from a more robust energy sector. I recently participated in a panel discussion at the Annual Legislative Conference of Congressional Black Caucus Foundation where we discussed this at length. A 2014 IHS study confirmed that of the 1.3 million job opportunities in oil and natural gas between now and 2030, nearly 408,000—32 percent—would be filled by African-American and Hispanic workers. Across the board, all of us on the panel agreed: encouraging growth in this industry will spur local economies benefiting all Americans and especially minorities.

While the list of reasons to lift the ban on crude oil exports is clear, political rhetoric in Washington threatens to throw cold water on this bipartisan agenda. We must call on lawmakers to fight for policies that create opportunities instead of unnecessarily hindering them.

[1] IHS, “Unleashing the Supply Chain,” March 2015

 

Dr. Margo Thorning is the senior vice president and chief economist with the American Council for Capital Formation.

Do NOT follow this link or you will be banned from the site!