Posted July 2, 2015
A few months ago API President and CEO Jack Gerard explained why America is experiencing an energy revolution:
“We got to this era of energy abundance and global energy leadership because of the entrepreneurial spirit of the private sector, the hard work of the American worker and the unique system of private property and individual rights of the American marketplace.”
He’s not the only one to notice the energy benefits of America’s unique private property and free market system. Jeff McMahon from Forbes has noted that private property rights draw investment and foster honesty and competition. Senior Fellow Gary Libecap from the Property and Environment Research Center explains:
The answer is secure private property rights to subsurface minerals. These are the major reason why the American oil and natural gas industry has been so dynamic and innovative. Except for western Canada, throughout the world, subsurface mineral rights are held by governments, and indeed, the U.S. government also holds the rights to hydrocarbon deposits on federal lands... When private parties own the mineral rights (often surface land owners), they capture any expected benefits from new discoveries and associated production…Stable property rights to mineral lands also provide motivation for hydrocarbon-producing firms to engage in long-term risky investments in new production technologies, such as fracking and horizontal drilling. When mineral rights are not secure or are held by the state and hence less predictable for reasons described below, entrepreneurs have reduced incentives to explore durable, long-range, but risky technologies. This is the major reason why fracking and horizontal drilling have been pioneered in the U.S. and not in other countries.
U.S. crude oil production was higher in April than at any point since 1971; drivers will see the lowest July 4 gas prices in five years; methane emissions are falling while natural gas production is rising; and greenhouse gas emissions from energy are near 20-year lows with natural gas leading the savings. And things could be even better, as embracing pro-development policies could help households, provide government needed revenue, create jobs, and boost growth, as we can see in the chart below from Wood Mackenzie’s new study:
Everything is great! Right?
Well, not exactly. Because there is the red column, found at the end of a winding road of duplicative regulation, rules based on ideology not science and government hurdles to energy development. Amazingly, it is a favorite in certain circles, and for a few it is just the tip of the iceberg. Not content with limiting development of energy, some folks envision a future where government has complete control over the sources of energy we can use – which means, given energy’s integration into our day–to-day lives, government control over basically everything.
These folks call themselves bold thinkers, claiming their plans are inspirational. But for true inspiration we can go back to 1776, where some truly bold people put these truly inspirational words to paper:
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed…
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.