Posted June 26, 2015
More from the new Wood Mackenzie study comparing the effects on the U.S. energy picture from pro-development policies versus a regulatory-constrained path. We’ve looked at the implications for energy supplies. Today we’ll zero in on two very different scenarios affecting individual American households.
Once again, here’s the main overview chart from the study, comparing impacts on key areas, depending on the energy policy path our country chooses:
The pro-development path includes increased access to oil and natural gas reserves, approaches to regulation and permitting that encourage accelerated energy production and export policies that allow U.S. oil and natural gas to reach global markets, stimulating domestic output. The constrained path would pretty much maintain the status quo on access, regulation and exports – costing the United States, as the study shows.
American households would benefit in a couple of ways from a pro-development energy strategy. There would be increased annual household income, Wood Mackenzie says, as well as energy expense savings. Let’s take income first:
Under the pro-development scenario, Wood Mackenzie estimate an increase of $118 billion in annual household income over the baseline by 2035. As you can see in the chart above, the cumulative boost would be nearly $1.2 trillion from 2015 to 2035. That’s a lot of zeroes.
By contrast, a regulatory constrained energy scenario would see household income decrease $43 billion below the baseline by 2035, the study says – a cumulative decrease of $783 billion from 2015-2035. Also a lot of zeroes, but in the wrong direction.
Now let’s look at energy costs:
A pro-development path would result in annual energy costs savings per household of $360 by 2035, with the cumulative savings reaching $508 billion from 2015-2035. The regulatory-constrained energy path would see annual energy cost increases for individual households of $242 by 2035, the study estimates, with cumulative cost increases from 2015-2035 totaling $652 billion.
In both ways Americans and their families would benefit from a pro-development approach to energy policy: higher income and increased disposable income due to lower energy expenses. If we self-limit energy development, U.S. households will lose ground, according to Wood Mackenzie.
That’s why it’s critically important for Americans to engage on energy as they begin to think about the 2016 election. There’s a clear choice to be made in terms of our nation’s leadership: elected officials who will pursue policies that harness America’s oil and natural gas reserves, to make our country more energy secure, stronger in the world, grow our economy and benefit individual Americans and their families – or those who would limit America’s energy potential. API President and CEO Jack Gerard:
“It is simple: If we are to create a better energy and economic future we’ll need policies and policymakers that are willing to partner with the oil and natural gas industry to responsibly develop the immense energy potential we have within our borders. We must demand that those who represent us reject the outdated anti-energy political orthodoxy of those who advocate for a regressive energy policy that keeps fossil fuels in the ground and demands and expects our society to embrace a substantially lower standard of living to satisfy their ‘off-fossil fuel’ agenda.”
ABOUT THE AUTHOR
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.