Tuesday, June 14, 2011

Energy solutions and job creation handcuffed
by liberal ideology

Commentary by James H. Shott

The lack of a logical, well-thought-out US energy policy – or any kind of energy policy, for that matter – is now being felt through high gasoline prices and unemployment. This is not new with the Obama administration; the US hasn’t had a sound energy policy in recent memory. But the situation has reached unimagined levels of incoherence under Mr. Obama.

At a time when the country was suffering, the Obama administration banned drilling for oil in the Gulf of Mexico after the tragic Macondo well explosion last year, idling thousands of workers in the oil industry and related businesses, and halting efforts to open new drilling projects that would provide new jobs and increase the oil supply. Production on every existing and potential project in the Gulf is at a standstill, except for one exploratory project, and some drilling rigs once operating there have been repositioned to other countries where there is a friendlier atmosphere for oil projects and jobs.

The left doesn’t like fossil fuels, and our president is a prisoner of leftist ideology. Coal and oil are the primary fuels in use today to produce electricity. Opponents don’t like coal because it produces pollution when it is burned, underground mining is dangerous to miners, and surface mining destroys the physical environment, they say. Oil is also a poor choice for energy, because it, too, pollutes the air when it is burned, and pollutes water and land if a drilling accident occurs.

Fossil fuels, however, offer significant advantages over newer, “greener” forms of energy. They produce 86 percent of our energy; there are proven reserves that will last dozens of years, at least; we have systems in place to utilize them to provide all of our energy; and they are relatively inexpensive, and would be less expensive still if the excessive regulations that raise the costs of acquisition and production are removed.

The costly and obstacle-ridden regulatory atmosphere has beaten the energy industry into submission as illustrated by American Electric Power’s announcement last week that it would retire or down-size 11 coal-fired power plants in seven states, costing 600 power plant jobs worth $40 million in wages rather than spend $6 billion to $8 billion in capital investment over the next decade to comply with EPA regulations. The industry has begun looking to natural gas to gradually replace coal and oil for electricity production. It is abundant and produces less pollution.

The Marcellus Shale Natural Gas Field Formation extends through West Virginia, Ohio, Pennsylvania and New York, and holds a huge amount of natural gas, perhaps more than 500 trillion cubic feet of gas. It is estimated that some horizontal drilling and hydraulic fracturing methods could recover as much as 10 percent of that, about 50 trillion cubic feet, enough to supply the entire United States for about two years, with a wellhead value of about one trillion dollars.

The American Petroleum Institute (API) notes that natural gas production in the Marcellus added 57,000 new jobs, mostly in Pennsylvania and West Virginia, as production increased in 2009. “This new analysis predicts that many tens of thousands of more jobs could be created in the coming years if public policies do not drastically limit production,” said Dr. Timothy J. Considine of Natural Resource Economics. "Under the best scenarios the development of Marcellus could mean $24 billion in total economic value to the region, which would positively impact all sectors of the economy.”

But the environmental faction is trying to accomplish through fear and distortion what it cannot accomplish by using reason and science. Opponents claim that deep drilling technologies such as hydraulic fracturing (fracking) pollute groundwater, a concern the API attributes largely to fear-mongering by environmental groups. “Hydraulic fracturing has been used in more than one million wells in the United States in the past 60+ years, and there is not one confirmed case of groundwater contamination,” API said, likely because the water table is usually 100 feet or less below the surface, while these gas reserves are more than 5,000 feet down.

The National Center for Policy Analysis (NCPA) calls fracking a technique with “startling” implications, saying that “natural gas may be only the beginning. Fracking also permits the extraction of previously-unrecoverable ‘tight oil,’ thereby postponing the day when the world runs out of petroleum.

“If gas hydrates, as well as shale gas, tight oil, oil sands and other unconventional sources can be tapped at reasonable cost, then the global energy picture looks radically different than it did only a few years ago. Suddenly it appears that there may be enough accessible hydrocarbons to power industrial civilization for centuries, if not millennia, to come,” NCAP wrote.

If we don’t shoot ourselves in the foot by doing to natural gas what we have done to coal and oil, our energy problems could be solved pretty soon.

However, leftist ideology is harming the country. It is impeding the recovery, killing jobs, and destroying our energy infrastructure in favor of an alternate one that isn’t yet able to replace the existing infrastructure.

So long as Washington is controlled by liberal ideologues, the future for both energy and jobs looks grim.

Cross-posted from Observations

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