Energy Blog

Energy Blog

US Chamber of Commerce Blog

Christopher Guith What If...America's Energy Renaissance Never Actually Happened?

Sitting here in late September 2016, it’s pretty difficult to imagine what the U.S. would look like if the staggering energy renaissance of the last decade had never occurred. It’s almost like trying to imagine what if Donald Trump had stuck to real estate or if Lebron never returned to Cleveland. All of these actualities are now so ingrained in our lives, we take them for granted as almost inevitable. Hindsight is a wonderful thing.

Yet there are plenty of politicians, anti-energy activists, and other misguided voices who would like to pull the plug on our energy renaissance. Thus, as part of our Energy Accountability Series, we felt it important to examine with facts and figures just how different our lives would be if the energy renaissance had never actually happened.

The simple result of our analysis is pretty clear: we’d be in a world of hurt. The U.S. would be short 4.3 million jobs and over half-a-trillion dollars in annual GDP. Perhaps of more concern to most Americans, electricity prices would be 31% higher and we’d all be paying 43% more at the pump. Carbon dioxide emissions would be 23% higher and we’d be importing 160% more oil.

We forget that the energy renaissance created more than 4 million jobs.

America is currently in the midst of a tremendous manufacturing build-out. From Texas to Ohio to Pennsylvania to Louisiana, we’re seeing new manufacturing investment being made to take advantage of energy supplies that are cheaper and more abundant that almost any other place in the world.  Yet had the energy renaissance never happened, U.S. industry would be paying twice as much for natural gas price, its output would be some $50 billion lower, and almost 400,000 jobs would be lost. And that’s just the industrial sector.

Our analysis also found some states would be especially drubbed absent the renaissance. Pennsylvania would lose $13 billion in annual GDP plus the almost $1 billion collected in “fees” from energy producers.  Ohio would lose more than 110,000 jobs and $10 billion in state GDP. And Wisconsin, an important supply-chain state, would lose almost $4 billion in state GDP and $2.2 billion in labor income, and its $10 billion per year cheese industry would be much less competitive against producers from outside of Wisconsin. 

We take for granted that gasoline prices have been at 10-year lows and aren’t erratically spiking every time a global disruption occurs. We forget that the renaissance created more than 4 million jobs—at the height of the Great Recession mind you—and ultimately disproved the conventional wisdom that the United States could never produce enough oil to impact the price at the pump.

Americans of every stripe, in every state have benefitted tremendously from the energy renaissance, with more jobs, lower energy prices, better energy security, and an increasingly competitive America. It’s important to remember that as the level of anti-energy zealotry ramps up through this election season.

This originally appeared on the Institute for 21st Century Energy's blog.

Sarah Keller  Energy

In just a few days, Donald Trump and Hilary Clinton will take the stage in the first of four scheduled debates in the 2016 presidential race – three between Trump and Clinton and another featuring vice presidential candidates Mike Pence and Tim Kaine.

While we hope the debates will tease out the specifics of each candidates’ plans, we have already heard a lot on the campaign trail about their vision for America’s future, including their thoughts on trade, immigration, financial services, and infrastructure.

Next up: Energy.

Energy is a vital economic component. With affordable and reliable energy, businesses of all stripes can foster economic growth. But when energy becomes less affordable – because of market forces or regulations that restrict production – employment and investment shrink and the whole economy suffers. Here are a few key energy issues that we’ll be keeping a close eye on during Monday’s debate.

Topic: Energy Production On Federal Lands and Waters

Hillary Clinton: "No future extraction [on federal lands]. I agree with that."(Town hall in New Hampshire, July 2015)

American Businesses: Energy production on federal lands – both onshore and offshore – is vitally important to the American people. It boosts our economy, supports good jobs and provides almost one-quarter of the nation’s oil, natural gas and coal, making us less dependent on imports. If we banned energy production on federal lands and water, America’s economy would lose nearly 400,000 jobs and $70 billion in annual GDP.

Donald Trump: “We’re going to lift moratoriums on energy production in federal areas.”(Speech in North Dakota, May 26, 2016)

American Businesses: It’s time we unleash America’s energy revolution. While production of oil and gas on private and state land has risen dramatically in the last few years, production on federal lands has actually declined. Furthermore, the vast majority of federal offshore lands are closed to production—some 86% of the outer continental shelf is off-limits for production and exploration. If we increased access to these undeveloped regions, we could create as many as 690,000 new jobs by 2030.

Topic: Coal’s Role in Our Energy Mix

Hillary Clinton: “We are going to put a lot of coal miners and coal companies out of business.” (Town hall in Columbus, Ohio, March 13, 2016)

American Businesses: The United States has the largest energy resource base in the world and we must continue to use it to our competitive advantage.  We also maintain the best engineers and technology development in the world which ensures we constantly increase our efficiency and reduce our emissions.  A technology-neutral energy policy that embraces all of our energy resources is the most efficient and best path to economic growth, decreased emissions, and economic competitiveness.

One of America’s greatest strengths is its diverse portfolio of energy resources. In 2016, coal is on track to fuel 30% of our electricity needs—second only to natural gas at 36% and followed by nuclear 20%, renewables 7%, and hydropower 7%.  That kind of diversity helps our economy withstand market fluctuations, and is a major contributor to affordable energy that provides U.S. businesses a significant competitive edge in the global economy.

Donald Trump: “We will get the bureaucracy out of the way of innovation, so we can pursue all forms of energy. … The government should not pick winners and losers. Instead, it should remove obstacles to exploration. Any market has ups and downs, but lifting these draconian barriers will ensure that we are no longer at the mercy of global markets.” (Speech in North Dakota, May 26, 2016)

American Businesses: The U.S. has the largest coal reserves in the world, making coal an indispensable foundation of the U.S. energy mix and an affordable and reliable source of energy. Coal energy is necessary to generate the electricity Americans demand, but a swarm of heavy-handed regulations from EPA and other agencies—such as the so-called “Clean Power Plan”—are shutting down coal plants, making it virtually impossible to build new ones, and leaving consumers and businesses left to pay increased energy bills. We must continue to find ways to use coal more efficiently, and invest in technologies that reduce emissions.

Topic: Pipeline Construction

Hillary Clinton: “I oppose [Keystone XL Pipeline] because I don’t think it’s in the best interest of what we need to do to combat climate change.” (Campaign event in Des Moines, Iowa, September 22, 2015)

American Businesses: Many areas in the U.S. are already missing out on the full benefits of our energy revolution because it has been difficult to move energy from where it is produced to where it is needed. The fierce resistance to pipeline construction by those who want to “keep it in the ground” is incredibly shortsighted. American economic growth, job creation, and improved quality of life depend on affordable, abundant energy. We can either import it — often from countries that aren’t friendly with us — or rely on domestic sources.

Donald Trump: “I’m saying yes, we will absolutely approve it, I want it built, but I want a piece of the profits.” (Speech in North Dakota, May 26, 2016)

American Businesses:  The energy renaissance has transformed how and where we get energy. As new areas of energy production emerge, new infrastructure is necessary to move it to consumers. As a continent, North America is extremely energy-rich and we benefit from energy trade with Canada and Mexico. The proposed Keystone XL pipeline would have provided the United States with the opportunity to access safe, reliable, and affordable energy supplies, and reduce our need to import crude oil from less stable countries and regions of the world..  In addition to improving the nation’s economic and energy security, the proposed project would have provided approximately 42,100 badly needed manufacturing and construction jobs, and contributed an estimated $3.4 billion in benefits to the U.S. economy.  However, the federal government cannot and should never be able to force a private company to disgorge shareholder profits as a condition for a legally required permit.

Topic: Fracking and the Natural Gas Boom

Hillary Clinton: "I don’t support [fracking] when any locality or any state is against it, No. 1. … So by the time we get through all of my conditions, I do not think there will be many places in America where fracking will continue to take place. And I think that’s the best approach, because right now, there are places where fracking is going on that are not sufficiently regulated." (CNN Democratic Presidential Primary Debate, March 6, 2016)

American Businesses: The shale revolution has lowered energy prices and fueled a renaissance in American manufacturing while improving our security by lowering our dependence on foreign oil. Thanks to fracking, the United States has increased total energy production for six-straight years, despite a 10% decrease in coal production. With increased domestic oil and natural gas production, U.S. energy security has improved for three years straight, according to the Institute of 21st Century Energy’s Index of U.S. Energy Security Risk, and oil prices have fallen from $110 a barrel in 2014 to under $50 a barrel in 2016. As a result, households have saved $747.30 per year on energy costs between 2008 and 2014.

Donald Trump: “We’re going to revoke policies that impose unwarranted restrictions on new drilling technologies. These technologies create millions of jobs with a smaller footprint than ever before.” (Speech in North Dakota, May 26, 2016)

American Businesses:  Today, natural gas from shale represents about one-third of all U.S. production and is forecast to supply up to 60% of all U.S. natural gas production by 2030. In fact, the U.S. is poised to become a net exporter of natural gas by 2017. Shale gas presents a significant opportunity to lower our nation’s energy security risk and increase the competitiveness of our manufacturing sector. The reduction in costs for power generation and feedstocks has not only made U.S. manufacturing more competitive, it has also spurred new investments in chemical and steel manufacturing. 

Previous: Debate Preview: What to Expect from Clinton and Trump on Infrastructure

Sean Hackbarth Energy opponents protest Dakota Access Pipeline outside the White House.Energy opponents sporting smartphones and backpacks rally against the Dakota Access Pipeline outside the White House.Photo credit: Sean Hackbarth / © U.S. Chamber of Commerce.

In the aftermath of the Obama administration blocking construction of part of the Dakota Access Pipeline in North Dakota, all sides have dug into their positions.

Needless to say there are plenty of people upset with the Obama administration’s decision to block permission to build at the 11th hour and give in protestors’ uncivil disruptions.

However, construction will continue, vowed Kelcy Warren, Chairman and CEO of Energy Transfer Partners, builder of the Dakota Access Pipeline.

In a memo to his employees, Warren points out his company is “committed to completing construction and safely operating” the pipeline. He adds the project is “nearly 60 percent complete, employs more than 8,000 highly trained skilled labor workers who are safely constructing it, and we have spent just over $1.6 billion on equipment, materials and the workforce to date.”

He also addressed the violence that’s unfortunately been a part of the protests, writing, “[T]hreats and attacks on our employees, their families and our contractors as well as the destruction of equipment and encroachment on private property must not be tolerated.”

API & @BldgTrdsUnions call on govt to uphold the rule of law on the Dakota Access Pipeline https://t.co/cZrUU6MOb5 pic.twitter.com/qRtXXenhS7

— API (@API_News) September 13, 2016

Unlike the protesters who claim water supplies might be threatened—they won’t—or cultural sites are being disturbed—they’re not— North America’s Building Trades Unions President Sean McGarvey said at a Capitol Hill event, those workers who are building the pipeline have their livelihoods put at risk by anti-energy extremists: “Hundreds of my members were thrown out of work” thanks to “the heavy hand of the federal government.”

On a press call with API President and CEO Jack Gerard McGarvey added:

We are deeply disturbed by the unprecedented action taken by President Obama to supersede the decision of a federal court judge and halt the lawful construction of the Dakota Access Pipeline project. Union members have been relying on these excellent, family supporting, middle class jobs with family health care, pensions, and good wages for over six months.

API President and CEO Jack Gerard worried about the “dangerous precedent” set by actions:

With the Dakota Access Pipeline, the administration’s recent attempts to change the rules, in the middle of the game, set a dangerous precedent for our country that could threaten other infrastructure projects like bridges, roads, and electricity transmission. Moving forward, it’s critical that the rule of law is followed as the need for new energy infrastructure grows.

A former head of the U.S. Pipeline and Hazardous Materials Safety Administration called the administration’s actions, the “out of left field.”

Approving and building energy infrastructure that draws the ire of anti-energy extremists is getting difficult.

How difficult?

Richard Kauzlarich, a former U.S. ambassador to Azerbaijan, compares the laborious permitting process, protracted negotiations, and now the fits and starts of actual construction as being worse than the challenges to pipeline construction in Central Asia in the 1990s:

“You were building it across three countries, going under rivers, through national parks and areas that were culturally and historically significant. At the end of the day, it was possible to negotiate all of the issues. The stakeholders all saw it in their interest to make this pipeline a success.”

Now Kauzlarich teaches the geopolitics of energy security at George Mason University and is wondering why that sort of stakeholder consultation seems to be breaking down in his own country.

The White House jumped into the Dakota Access oil pipeline fight September 9 after weeks of clashes in North Dakota between private security guards and Native American tribes and environmentalists protesting the construction.

“I may have been on the other side of the world, but somehow we were able to deal with the problems that seem to be in play in this,” Kauzlarich said. “I keep getting more and more convinced that our own energy security is not just a question of how much oil we produce, but how do we efficiently and in an environmentally sound way get oil to its ultimate consumer.”

A Wall Street Journal editorial put it well, “If you want to know why they’re not serious [about infrastructure improvements], look no further than the Obama Administration’s order halting construction on a sliver of an oil pipeline in North Dakota even after the U.S. won in court.”

Stopping energy development by blocking energy infrastructure construction is the goal of “Keep it in the ground” folks, so putting up as many barriers is exactly what they want.

Protesters continue to pressure the Obama administration—might as well, since he’s giving them everything they want—by organizing a rally outside the White House.

Sen. Bernie Sanders (I-Vt.) stirred the “Keep in the ground,” energy opponents by demanding that "further administration action is needed.” The future of our energy includes "no pipelines,” he said to cheers.

While those at the rally fully embraced Sanders’ energy fiction and demanded action, their own actions speak volumes.

Across Lafayette Park, energy opponents sported backpacks and smartphones, held banners and rode bikes that wouldn’t exist without abundant energy.

Sen. Bernie Sanders brings out the smartphones. All brought to you by fossil fuels. #NoDAPL pic.twitter.com/D3otNqDozx

— Sean Hackbarth (@seanhackbarth) September 13, 2016

Our country relies on energy and we get that by safely producing and transporting it by way of energy infrastructure projects like the Dakota Access Pipeline. Once you get past their hyperbole, you see that pipeline opponents want to abandon all the benefits we get from that abundance.