U.S. Government Holding Back Economic Growth
June 3, 2013
The U.S. energy sector has become one of the largest energy producers in the world. The world has changed since the passage of the 1975 Energy Policy and Conservation Act, a law that set the tone for energy policy for nearly a half-century. Technology and demographics have eviscerated old ideas of limits and import dependency. Given the new abundance, the United States now has the opportunity to become a major energy exporter, says Mark Mills, a senior fellow at the Manhattan Institute.
Today, oil imports account for about 40 percent of America's $750 billion annual trade deficit, a deficit that drains the gross domestic product and kills jobs. Expanding the domestic production of hydrocarbons to reduce imports as well as increase exports will function as an enormous subsidy-free stimulus to the U.S. economy, directly creating all manner of jobs across the nation.
- Over the coming decade, private investment in the American energy renaissance is projected to grow to a cumulative $5 trillion without subsidy or taxpayer assistance.
- In the past four years alone, $150 billion of foreign direct investment has been made in America's hydrocarbon domains.
- No government stimulus program or infrastructure investment could create these results.
To ensure and accelerate all the economic, employment and geopolitical benefits from America's hydrocarbon capabilities, the U.S. government should immediately:
- Approve any and all qualified entities seeking to export natural gas.
- Approve the Keystone XL pipeline, allowing Canadian crude to replace Venezuelan imports.
- Direct the Department of Commerce to approve any application to export crude oil, which is illegal under current law.
Then the Obama administration and Congress should work together to do everything possible to:
- Encourage private domestic and foreign investment in hydrocarbons.
- Open up greater access to hydrocarbon resources on federal lands, where 85 percent of offshore -- and half of onshore -- territory remains off-limits.
Finally, Congress should:
- Pursue 21st century omnibus energy legislation, starting with a clean slate.
- Repeal the authority of the Departments of Energy and Commerce over hydrocarbon exports to open up a free market consistent with historical trade principles.
- Restructure federal energy priorities away from funding commercial projects, focusing instead on basic research and development.
Source: Mark Mills, "The Case for Exports: America's Hydrocarbon Industry Can Revive the Economy and Eliminate the Trade Deficit," Manhattan Institute, May 2013.
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