The Gift

Mark Green
Posted December 24, 2014

The gift that is American energy is seen in some key numbers:

• Domestic crude oil production reaching more than 9 million barrels per day last month, the highest level in more than two decades, according to the U.S. Energy Information Administration (EIA).
• Total U.S. net imports of energy as a share of energy consumption falling to their lowest level in nearly 30 years during the first six months of this year.
• Gasoline prices dropping to an average of $2.47 per gallon last week, their lowest point since May 2009, according to the Lundberg Survey Inc.

The first two numbers might not fully register with a lot of Americans. We’ll come back to them. The last one, gasoline prices, does so loudly.

Retail gasoline prices fell after crude oil prices dropped for the fourth straight week – a product of weaker-than-expected global demand and increasing production, which EIA says will save American households $550 next year, Bloomberg News reports. Trilby Lundberg, president of Lundberg Survey to Bloomberg:

“It is a dramatic boon to fuel consumers. (Gasoline) is a modest portion of our giant gross domestic product and yet it does have a pervasive and festive benefit to motorists.”

During this season of gift-giving and receiving, Americans should give thanks for the gifts of plentiful domestic oil and natural gas, modern technologies to harness them and an industry robust and innovative enough to bring the two together, resulting in surging, home-grown production. Indeed, the dramatic increase in U.S. oil production is the key addition to global supply that’s putting downward pressure on the cost of crude, the No. 1 factor in pump prices.

American energy means consumer benefits already noted. It also means broader benefits to the economy, to national security and to the United States’ place in the world, measured in terms of trade and foreign policy options.

We’re stronger and safer in the world because we’re less dependent on imports outside North America. We have foreign policy options because, thanks to surging domestic production, the United States is positioned to export crude oil and natural gas for the first time in decades – both of which studies show would generate significant economic benefits for the U.S.

At home, oil and natural gas are the foundational fuels that run our economy, accounting for more than 60 percent of the energy Americans use. EIA says those fuels will continue to supply more than 60 percent of the energy we use in 2040. So, while America pursues an all-of-the-above approach that employs renewables, nuclear, coal and more, oil and natural gas will continue to be the main engines of American life.

This is because those fuels are the best fuels to support a modern standard of living, due to their availability, portability, flexibility and basic energy intensity. America is rich because it has the energy to manufacture and produce, as well as the energy that provides opportunity and mobility for its citizens.

In his book, “The Moral Case for Fossil Fuels,” Alex Epstein asserts that fossil fuels provide enormous benefits that are as fundamental to life as food, clothing, shelter and health care – all of which require affordable, reliable energy. Epstein:

 … the cheap, plentiful, reliable energy we get from fossil fuels and other forms of cheap, plentiful, reliable energy, combined with human ingenuity, gives us the ability to transform the world around us into a place that is far safer from any health hazards (man-made or natural), far safer from any climate change (man-made or natural), and far richer in resources now and in the future. Fossil fuel technology transforms nature to improve human life on an epic scale.

More:

It is the only energy technology that can currently meet the energy needs of all 7+ billion people on this planet. While there are some truly exciting supplemental technologies that may rise to dominance in some distant decade, that does not diminish the greatness or immense value of fossil fuel technology. Ultimately, the moral case for fossil fuels is not about fossil fuels; it’s the moral case for using cheap, plentiful, reliable energy to amplify our abilities to make the world a better place – a better place for human beings.

American energy is an amazing gift. Few would have spoken of it in such terms just a decade ago – before safe, advanced hydraulic fracturing and horizontal drilling unlocked vast energy reserves held in shale and other tight-rock formations, launching the U.S. energy revolution.

That revolution can continue. With the right leadership, greater access to domestic reserves and sensible regulatory and permitting policies, safe, responsible energy development can continue and increase. It truly can be the gift that keeps on giving.