Here’s the first of a series of posts sparked by speeches and presentations at this week’s U.S. Energy Information Administration (EIA) energy conference. U.S. Energy Secretary Ernest Moniz set the tone for EIA’s event, noting that the U.S. faces a set of energy challenges, vulnerabilities and opportunities. At the heart of the discussion: America’s energy resurgence. Moniz:
“By almost any simple measure for sure, our energy security position has been enhanced a great deal over the last several years: No. 1 producer of oil and gas, oil imports in terms of a fraction of crude plus products back at 1952 levels. In fact, our production increasing so substantially in the last five years that it has become a critical factor in global pricing dynamics, challenging decades-old assumptions by OPEC, for example. We have mothballed LNG import facilities are being repurposed for exports, likely to begin next year, and, frankly, likely to see us in several years at least become one of the major LNG players on the global scene.”
Moniz credited the energy revolution for rejuvenating U.S. manufacturing, particularly among energy-intensive industries that are capitalizing on affordable natural gas for power and/or as a feedstock for a variety of products. America’s increased use of natural gas also has helped lead U.S. efforts to reduce carbon dioxide emissions, he said.
In all of the above, the secretary certainly makes good point. Thanks to innovative, advanced hydraulic fracturing and horizontal drilling, the U.S. is the world’s energy-producing leader. America is stronger and its citizens are more prosperous because we’re producing more of the energy we use right here at home.
Even so, Moniz tempered some of the enthusiasm over America’s oil and natural gas-based energy surge:
“Importantly, the U.S. remains a large oil importer and is a large oil product exporter. Both of these facts directly tie us to global markets, global oil markets and oil price volatility. We are not immune to the risks in global oil markets despite our increased production. And indeed we continue to focus heavily on lowering our oil dependence. Even as the energy situation in the U.S. enhances energy security, the global market is experiencing the uncertainty generated by events in Africa, the Middle East and Russia, raising the possibility of global oil price shocks.”
It’s true: Crude oil is a globally traded commodity, so the United States is and will be connected to those markets. For that reason the U.S. would be wise to pursue policies that help shield against the potential impacts of global supply disruptions.
Now, while stipulating the secretary wouldn’t be a loyal member of the administration if he didn’t embrace the benefits of the oil and natural gas revolution – and then pivot to other fuels under an all-of-the-above energy strategy – there’s another way to anticipate the “risks in global markets.”
That would be to keep lowering our oil imports dependence – by sustaining and growing the domestic energy revolution: increasing access to federal oil and gas reserves, especially offshore; crafting commonsense regulation that doesn’t needlessly hinder development; revamping permitting policies to help foster fairness and certainty for energy producers; advancing the export of U.S. crude oil and natural gas, both of which would help stimulate additional domestic production. Our imports have been falling, and the benefits in terms of security and consumer costs are clear. Becoming even more energy self-sufficient would strengthen the U.S. against global market fluctuations, and it’s doable.
Industry is ready to produce more home-grown energy that will reduce America’s dependence on imports. That America has that choice is remarkable. Less than a decade ago the U.S. had shrinking energy options. Today we can choose to develop more of our own energy, safely and responsibly, gathering to ourselves greater control of the future. That’s an historic, generational opportunity, if we choose it. API President and CEO Jack Gerard, from remarks earlier this year:
“Our nation is conquering what for decades has been our most dogged economic, social and geopolitical vulnerability – energy dependence and energy insecurity. … To continue this progress we should be mindful that these advances could easily be stalled or even reversed without forward-looking energy policies that encourage safe and responsible domestic energy development and production, that support a robust refining sector, and embrace our nation’s bright energy future.”
By Mark Green
Originally posted June 18, 2015
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