The United States has been faced with a lot of problems lately. A massive trade deficit; turmoil in the Middle East, job losses, and a lack of competitiveness among them. Let’s look at some of the critical issues.
1. The economic and military stakes related to our energy supply continue to rise. As we artificially constrict domestic energy production Teheran has continued to raise the stakes in the Straights of Hormuz. The control of the flow of oil is their primary weapon as Der Spiegel points out. This a threat to the global economy, not just our own. It will continue to be the primary flash point for conflict until we address our energy dependence pragmatically.
War is a very expensive proposition, and ever since the Great White Fleet a top concern of our defense establishment has been fuel resources. Today’s biofuels programs are politically correct but will do little to either reduce the military’s carbon footprint or strategic energy reserves. Continued reliance on unstable or uneconomic sources places our ability to defend our nation in jeopardy.
2 – On December 31, USA Today reported that gasoline and other petroleum derivatives have become America’s leading export industry at over $88 Billion in 2011. For the first time since the 1960’s, energy exports are leading the way and if allowed to grow, have the power to revive our economy.
3 – On December 27, the Wall Street Journal reported that the boom in shale gas production has spurred a race by the U.S. chemical industry to build petrochemical based manufacturing plants in places like West Virginia, Pennsylvania, North Dakota, and elsewhere. Jim Fitterling, a VP at Dow Chemical, pointed out that the United States now has the lowest cost for natural gas outside of the Middle East. Petrochemicals are critical to the modern economy. From the clothes you wear to the drugs you take to the house you live in, to the food you eat these products are the backbone of the economy. And you can’t get them from solar or wind or geothermal power.
The United States is experiencing one of the biggest energy booms in its history in places like North Dakota and Pennsylvania and West Virginia and even New York. New and massive fields recently discovered offshore have reversed the decline in stated oil reserves for the first time in many years. The Alberta oil sand deposits are paying off after 30 years of promise. This sea change has the potential to create millions of manufacturing jobs. Jobs we desperately need.
4 – Our current administrations policies are strongly opposed to conventional energy production. It has done every single thing it can to stymie these developments. From their program to block the Keystone XL pipeline to the invocation of the Jones Act to block drilling in the Cook Inlet to the EPA’s suspicious report (commentary here & here) on contamination at the Pavillion, Wyoming site to the 18 month delay imposed on drilling in the Gulf of Mexico after the Deepwater Horizon disaster, our government has implemented a policy that will cause clear and present danger to our nation.
5 – From its investment in Solyndra to that in Fisker to the guarantees backing RFK Jr’s BrightSource Energy, the administrations track record of backing alternative energy programs has established a substantial record for cronyism and poor performance. These projects passed no technical or economic litmus tests but do make great sound bites.
We have a dangerous policy conflict that must be resolved. We have the opportunity to create a new wave of prosperity and a chance to reduce the potential for conflict or be relegated to the sidelines of history. It is common sense versus current government policy.
When faced with the facts one can draw some objective conclusions. First, many of our current policies are not working to resolve the critical issues facing the nation.
Second, as the Iranians raise the possibility of a combination of oil crisis and debt crisis we would be hit with a 1-2 punch to the global economy.
Third, the Middle East is undergoing an earth-shaking change of its own and will be a very different place in the next decade. Whether these countries will be friendly or even stable is a deep concern. Unstable energy supplies equals unstable global security . Ten years of war and trillions of dollars and thousands of lives lost have done little to address this prime issue.
In the meantime, the opportunity to turn the economy around, shield our country from some of these shocks, and create long-term well-paying jobs is staring us in the eyes.We have been talking about energy independence and reducing our trade deficits for the past 40 years and we have a golden opportunity sitting right in front of us.
At a time when the majority of Americans seem to agree that our national debt is unsustainable and in itself a clear and present danger to our security as Admiral Mullen recently testified to Congress there has never been a better case for moving forward responsibly and rapidly on conventional energy exploitation.
Technology exists today to both safeguard the environment and extract natural resources more efficiently than ever before. But the Luddite manner and Gaia worship have got to go. An accelerated program to exploit North American natural gas and oil must become a national priority.
We have a window of opportunity to do the greater good for the many and even for our planet if we manage our resources well. We cannot afford to walk away from this one.
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