The Politics of Energy

Mark Green
Posted September 19, 2012

Two events, two thought-provoking discussions of energy as a potential game-changer – for the U.S. economy and the ongoing presidential contest. API President and CEO Jack Gerard participated in both: Vote 4 Energy’s program on energy as an issue in the upcoming presidential debates, and a discussion of the American energy boom hosted by The Week magazine. Highlights from both:

• U.S. energy security is possible through increased access to domestic oil and natural gas reserves and Canadian reserves. Because oil is a globally traded commodity, it’s more accurate to aim for energy security (vs. “independence”), Gerard said. As such, it’s critical to focus U.S. energy policy on increasing our contribution to the overall supply, he said.

• Energy’s demonstrated job-creating ability has the potential to break the usual political gridlock in Washington, as both sides recognize the lift it could give the economy. Gerard said the public is already there, citing a recent poll that showed 9 in 10 believe increased access to domestic energy could lead to more American jobs.
• We can “reshape our economy” by producing more of our own energy, Gerard said. The oil and natural gas industry sends $86 million a day to the U.S. treasury and could do more. Increased access to oil and natural gas could generate 1.4 million jobs and an additional $800 billion in revenue to government by 2030, according to a study by the Wood Mackenzie energy consulting firm.
• The crafting of energy policy should steer clear of the zero-sum game approach, in which one energy source is pitted against another, said SolarReserve CEO Kevin Smith. Gerard said tax policies are needed that treat all industries the same. We shouldn’t increase the cost of fossil fuels to make other energies competitive, he said. The Progressive Policy Institute’s Michael Mandel talked of “energy realism,” which starts by acknowledging that oil and gas is a significant part of the country’s energy portfolio and will be in the future.
• An all-of-the-above approach to energy should be precisely that. Frank Verrastro of the Center for Strategic and International Studies said development of renewable energies should go forward while recognizing that oil and natural gas are going to be around for decades. The oil and natural gas industry invested $71 billion in greenhouse gas-reducing technologies from 2000-2010 – nearly twice as much as the federal government ($43 billion) and almost as much as all other investors combined ($74 billion).

Former U.S. Sen. Byron Dorgan said the opportunity for American energy self-sufficiency – created by the boom in domestic oil and natural gas – is a “very, very big deal.” He’s right. Making good on that opportunity will depend on sound energy policy – and actions to turn policies into reality. Ultimately, as Gerard said, public policy must serve the American public – with affordable, reliable energy.