A decade ago, an economic crisis gripped the United States. Washington, D.C. responded by spending other peoples’ money on corporate bailouts and a $787 billion “stimulus.“
Throughout those dark economic times, however, the oil and natural gas sector shined bright – without help from Washington. It shines even brighter today, to the benefit of all energy consumers.
In 2009, the U.S. surpassed Russia as the world’s top supplier of natural gas. A few years later, American producers surpassed Saudi Arabia as the largest supplier of all petroleum products. Today, American energy is an even greater economic powerhouse, creating jobs and spurring economic growth across the country.
Domestic oil supply has more than doubled over the last decade, making the U.S. the world’s top producer of crude. Last year, energy companies operating in America produced more natural gas than the entire Middle East.
In a few short years, the U.S. will likely become the world’s largest exporter of liquefied natural gas (LNG). Exporting “freedom molecules,” as the Department of Energy calls them, gives our allies a stable energy source that can help relieve their dangerous dependence on Russian fuel.
America’s energy boom should be celebrated, not demonized. As our energy sector has grown and prospered, so have all the supporting manufacturing and service industries that support it. And U.S. consumers have enjoyed the lower electric bills and pump prices that come with increased supplies.
Furthermore, the shale revolution has quite literally saved lives. Cheaper home heating is averting more than 10,000 winter deaths per year, according to a recent working paper from the National Bureau of Economic Research.
Yet all this good news could be brought to a grinding halt – and then reversed – if environmental extremists get their way. One example of their radical proposals is the Green New Deal, which calls for the elimination of conventional energy sources. Like so many of these proposals, it aims to use regulations, taxes and outright bans on natural resource development to drive up the price of energy sources they don’t like, and taxpayer dollars and mandates to subsidize the kinds of energy they do like.
America’s energy boom should be celebrated, not demonized. As our energy sector has grown and prospered, so have all the supporting manufacturing and service industries that support it.
It’s not just a matter of favoring carbon-free energy sources over those that emit carbon. If that were the case, these plans would be all in on hydroelectric and nuclear power. The fact that they’re not demonstrates the hypocrisy – and the irrationality – of the whole agenda.
Under their radical energy policies, Americans would suffer multiple times over. They would pay higher taxes to cover the subsidies. They would pay more on their energy bills. And they would be hit again and again through higher prices for food, clothes and health care as businesses pass their pricier energy costs onto consumers.
And despite claims of economic justice, these policies would inevitably hit low-income families the hardest. After all, they spend a higher percentage of their budget on energy costs.
Will the climate benefit be worth the economic squeeze that big government policies like the Green New Deal would inflict upon Americans? Hardly.
A climate model developed by the National Center for Atmospheric Research allows us to assess how different climate policies will affect global temperatures and sea levels. Even if the U.S. were to achieve a net-zero greenhouse gas emissions target, it would abate global warming by approximately 0.2 degrees Celsius by the year 2100. The reduction in sea level rise would be less than 2 centimeters.
One final observation: The U.S. shouldn’t be the focus of those determined to reduce carbon emissions. As Philip Rossetti, former director for energy policy at the American Action Forum, pointed out in a recent report, 92 percent of carbon dioxide emissions growth will come from countries that are not members of the Organization for Economic Co-operation and Development.
The developing world, where nearly 1 billion people do not have access to electricity, places a much higher priority on tackling energy poverty. The International Energy Agency projects that coal, oil and natural gas will likely meet the overwhelming majority of the world’s energy needs well into the future.
Policies that stomp out America’s energy boom would have the unintended consequence of making the planet worse off. Regulations that limit domestic energy supplies will not stop the domestic or global consumption of natural resources that environmental activists loathe. If policymakers were to prohibit domestic natural resource extraction, the much more realistic outcome is that production will shift to places where the environmental and safety standards are not as rigorous.
Energy is a key building block for economic prosperity and higher standards of living. Skepticism of policies like the Green New Deal is not a concession that we should care about jobs numbers and the economy over the environment. On the contrary, it is a warning that if Washington goes for a command-and-control energy policy – a three-legged stool of tax, regulate and keep-it-in-the-ground – America will lose on both.
Nicolas Loris is Deputy Director of the Thomas A. Roe Institute for Economic Policy Studies and Herbert and Joyce Morgan Fellow in Energy and Environmental Policy at the Heritage Foundation.