Vladimir Putin's use of Russian energy as a means of geopolitical coercion should be a wake-up call to the strategic importance of the burgeoning energy production in the U.S. Just today, Putin again brandished his energy arsenal to threaten not only the Ukraine but European countries. In a letter to 18 European leaders , Putin threatened to "completely or partially cease gas deliveries" if Europe does not "help" settle the up to $35 billion gas debt the Ukraine owes to Russia. The pipelines that carry Russian natural gas to European run across the Ukraine.
Just what would it take for the U. S. to assume the role of the energy super power- a role that OPEC predicted would flow to the U.S. in the near future? The last few years of the shale revolution have demonstrated that America has immense energy resources. America's energy opportunity, however, extends well beyond this recent meteoric rise in the production of oil and gas from shale for which Texas, North Dakota, Pennsylvania and several other states are noteworthy. Beyond these shale plays, the U.S. has vast hydrocarbon resources offshore, in Alaska and throughout the western states. The federal government, however, has limited or denied access to these energy fuels for almost forty years. Since the early 1970's, federal policies driven by now an entrenched environmental establishment have blocked production of domestic oil and natural gas. Within the last six years, the vehemence has shifted to coal- the suppression of which is well underway through EPA regulation
For a legislated path to unleash this country's energy resources on a scale that could rival if not dominate Russian and Middle Eastern resources, consider "The Great American Energy Renaissance Act" filed March 27 by Senator Ted Cruz of Texas and Congressman Jim Bridenstine of Oklahoma. The bill provides a comprehensive template for liberating the long- suppressed energy bounty of the U.S. without gutting legitimate environmental requirements under existing law.
Foremost, the bill avoids a fatal policy flaw typical in past energy bills such as the Energy Policy Act of 2007 infamous for its creation of the mandates and subsidies for ethanol. Oddly appealing to many Republicans who otherwise champion free enterprise, past federal energy plans make the counter-productive error of all centralized economic plans. They substitute government dictates for competitive market dynamics.
Would-be candidates for the presidency on the right side of the aisle recently promoting energy production through ‘energy master plans' might think again. The highly capitally-intensive, risk-taking and competitive energy market does not flower under federal master plans! The American Energy Renaissance Act restrains federal interference in the energy sector and strengthens the states' longstanding primary authority over upstream energy extraction.
To the naysayers who assume the U.S. could not export natural gas fast enough to measurably diminish Putin's leverage on energy-dependent European countries: watch what could happen if the many pending export permits for liquefied natural gas (LNG) were approved. With the right price signals, energy players can be extraordinarily nimble actors. The exponential upsurge in domestic production of oil and gas since 2008 defied all odds.
This American Energy Renaissance Act would expedite federal approvals for energy exports across the board- natural gas, crude oil, and coal. Such a change would send a powerful signal to Putin as would approval of projects to expand energy infrastructure like the Keystone pipeline. More than a symbol, the Keystone pipeline would create the vital connection between Canadian and U.S. resources - creating a North American axis of energy that even OPEC, several years ago, claimed would soon eclipse the axis now led by Middle Eastern countries. If the Keystone pipeline was approved as it should have been years ago, the North American energy axis would be up and running. Putin's energy clout (and Russian GDP) likely would be on the wane.
So much attention has been devoted to the shale revolution that the vast store of energy resources under federal lands and federal waters are rarely mentioned these days. Without government prohibitions, these resources remain ripe for development and can take advantage of the many enhanced extraction technologies applied to shale. The original laws over these so-called "public" lands are dedicated to advance the productive use of these lands for the benefit of the public. Over the years, the federal agencies - legally enabled by scores of friendly "sue and settle" lawsuits brought by environmental organizations- have found endless ways to obstruct production. The current administration has increased this trend.
The Cruz/Bridenstine bill would provide access to these energy resources under public lands. And these lands of the western U.S. likely hold the mother lode of this country's hydrocarbon energy wealth. Consider oil shale- not to be confused with shale oil. The U.S. Geological Service (USGS) estimates 2.6 trillion barrels of oil shale recoverable in several western states.
And the bill would also rescind the most preposterous of bans on energy development in U.S. history: a congressional prohibition on drilling within the Arctic National Wildlife Refuge (ANWR). The oil drilling last planned would occur on .001 percent of the Refuge's 19.5 million acres! The bill also would end the de facto permitoria on offshore drilling along all U.S. coasts and would accelerate permitting in the Gulf of Mexico where production was halted after the oil spill in 2010 for almost five months and is still well below pre-spill levels.
The American Energy Renaissance Act importantly addresses energy production on tribal lands where Native Americans are now virtually prohibited from taking economic advantage of their considerable oil, natural gas, coal and uranium resources. When unemployment on these reservations is four times higher than the national average (e.g. 50 percent) and average income is one-third less that of the U.S., these federal strictures on job creation are morally appalling.
Many have noted that increased domestic energy production offers a painless avenue for reducing the national debt and is already reducing trade deficits as oil imports now steadily fall. To this end, the Energy Renaissance Act creates a Debt Freedom Fund. Revenues generated by energy production authorized by the Act would be dedicated to this fund.
This is an opportune time in our nation's history to unleash the full monty of the North American energy potential. After forty years of technological innovation, today's energy industry is well-equipped to extract and process hydrocarbon fuels in a far more environmentally safe manner than ever before.
Public opinion polls over the last decades consistently show strong support for U.S. energy abundance - typically construed as energy independence. And those same polls show that the voting public understand the connection between domestic energy development and job creation, balanced budgets and national security. With a stagnant economy, a staggering national debt and an increasingly unstable world, the unprecedented energy opportunity begs for the taking. And for our closest allies and fledlging democracies still recovering from soviet rule, let this country deploy our energy wealth as a shield to subdue Putin's aggressive dreams."