Over the past decade, American energy supply has undergone a remarkable transformation. We are experiencing no less than a resource revolution – an “American spring” for a nation seeking freedom from dependence on hostile countries for energy to power our economy.
The United States – once heavily reliant on an unpredictable cartel and worried about the prospect of running out of fossil fuels – now enjoys projections of once unimaginable abundance from domestic and other North American sources.
Bedrock assumptions about the future have undergone creative destruction – it’s like hydraulic fracturing of conventional wisdom using American ingenuity.
We now boast supply projections that were once unthinkable and can aspire to something that was inconceivable in the not too distant past – North American energy independence.
This goal is now within our reach as long as federal policymakers make the right choices. By following a formula that relies on cutting red tape, encouraging investments, and developing resources wisely, we can fulfill this aspiration within the next decade.
I am heartened to hear that national leaders, at the highest level, are now also talking about these new realities.
Here’s how it could work by the end of the decade.
Looking first at consumption, most experts believe American demand for petroleum a decade from now will remain about what it is today – 18 million barrels per day. On the supply side, the US currently produces about 9 million barrels a day domestically and imports another 3 from Canada and Mexico. That leaves another 6 million barrels a day from overseas sources that we currently import.
Making up that difference is within our grasp.
Approving the Keystone XL pipeline to connect energy-rich Canadian oil sands to American refinery hubs would take us a big step forward on the road toward independence. That alone could bring nearly 1 million barrels a day to the United States, given the project’s current estimated capacity. And this increase is just the start since analysts project production in Canada could increase by 2.5 million barrels a day. That means getting government permission to bring secure Canadian oil here could be the only obstacle to this expanded North American energy partnership.
Experts also believe tight oil production in the U.S. could increase by another 4 million barrels a day. But in order for this to happen, Washington policymakers cannot adopt new federal regulations that effectively slow down this energy and jobs boom. That also means federal policies must change, since 96% of the new oil production in the U.S. since 2007 has come from non-federal sources.
By having more common-sense policies in Washington, we could also boost production onshore and offshore in Alaska up to 1 million barrels a day. The Trans-Alaska Pipeline is already built, is running at only one-third capacity, and could easily transport this increased production.
Finally, reducing permitting hurdles in the Gulf of Mexico could increase production there by another 2.5 million barrels a day. Currently it takes four times as long to get a project approved under the Obama administration compared to previous presidents.
Considering the potential of increased supply from the Keystone pipeline, production on state and local lands, Alaska and the Gulf of Mexico, the U.S. could substitute the 6 million barrels a day it imports from overseas sources with alternatives produced domestically or from “friendly” countries. The economic explosion would help bring good jobs to Americans yearning to go back to work in the worst economy since the Great Depression.
It’s instructive that these new opportunities were not brought about by new Washington regulations or mandates. Instead, technological breakthroughs and market forces created these exciting prospects that are now providing jobs in places like North Dakota and Pennsylvania.
Indeed, in some instances Washington red tape has actually proven the single greatest obstacle to this jobs and energy revolution. For example, although the president pledged in January to do “whatever it takes” to move the economy forward, he has used up nearly every excuse in the book to delay and deny the necessary approval for the Keystone XL pipeline. While many of us do not believe he ever intends to green light this commonsense energy infrastructure project, our commitment to this and projects like it remainssteadfast.
Americans should work together to fulfill the promise of North American energy independence. It’s a goal we can all support and an aspiration within our reach.
We’re in the midst of an American energy spring. Wrongheaded Washington policies are the only obstacles that could halt its bloom.
Republican Fred Upton represents Michigan's 6th congressional district in the US House of Representatives. He serves as chairman of the Committee on Energy and Commerce.
Republican Fred Upton represents Michigan's 6th congressional district in the House of Representatives. He is chairman of the House Committee on Energy and Commerce.