The Romney recovery will begin with energy
Americans are more pessimistic about the economy than they’ve been in months. In August, nearly half of all Americans said the economy was heading in the wrong direction. And after last week’s jobs report, which showed that for every American who found a job in August, three left the workforce (many simply giving up after months of searching), their pessimism is understandable.
But while most of America suffers with an unemployment and underemployment rate approaching 15 percent, there’s one state that remains incredibly prosperous. Indeed, it’s at full employment, with unemployment at just 3 percent.
That state is North Dakota, and it offers a hint of what could be in store for the rest of America under a Romney administration committed to North American energy independence, one of the most ambitious goals in the Romney Plan for a Stronger Middle Class.
North Dakota is in the midst of an energy boom that has given it the lowest unemployment rate in the country and a surplus of more than $1.2 billion, and enabled the legislature to cut taxes each of the last three years.
Just a decade ago, none of this seemed possible. What little oil and gas North Dakota had was trapped tight in shale from which producers couldn’t economically extract it.
But as has happened so many times in our history, American innovation radically changed the boundaries of what was feasible. Two technologies, hydraulic fracturing and horizontal drilling, combined to allow developers to extract enormous amounts of oil and gas trapped in shale deep underground.
With a single surface well, producers can now drill straight down nearly two miles, then turn 90 degrees and drill two miles horizontally in many directions. It’s a modern marvel to match the Wright Brothers’ airplane and Thomas Edison’s light bulb.
The result has been a revolution in American energy. Our potential for domestic production of oil and gas are, for the foreseeable future, limitless.
North Dakota is on the frontier of this revolution and its people are experiencing the effects firsthand. The state has gone from an estimated 150 million barrels of recoverable oil in 1995 to more than 24 billion today. That’s a 16,000 percent increase.
Other states are sharing in the boom from shale oil and gas revolution. The Marcellus shale is beginning to return opportunity to western Pennsylvania. The same has happened with the Eagle Ford shale in Texas. Even eastern Ohio will be producing large volumes of oil soon from the Utica shale.
The dramatic increase in supply has led to a precipitous drop in price. In 2008, natural gas cost on average $7.97 per trillion cubic feet. Today, the price has dropped by almost 70 percent to about $2.60.
Abundant and inexpensive energy is enabling what many thought impossible just a few years ago: the return of manufacturing jobs to America.
The Romney Recovery will be led by this American energy revolution. With a president who is determined to take advantage of this incredible new potential (rather than hinder it as President Obama has — almost all of the new production has taken place on private rather than public lands) there’s no reason the rest of America can’t share in the prosperity North Dakota has prefaced.
Harold Hamm, the man who led the way in developing North Dakota’s Bakken shale, is the perfect champion for these new possibilities under a Romney administration. He’s already one of Governor Romney’s top energy advisors. Hamm would make a far better Secretary of Energy than Steven Chu, who apparently assured President Obama that he shouldn’t worry about high gas prices because we would all be driving battery powered cars by now. Secretary Chu himself, of course, doesn’t even own a car.
Mr. Hamm spoke at one of the workshops I hosted at the Republican National Convention last month, dubbed Newt University by the RNC. We devoted the third day entirely to American energy. (You can watch it at NewtUniversity.com.) It happened to be the day Joe Scarborough and Mika Brzezinski from MSNBC’s Morning Joe came to attend. They sat through Mr. Hamm’s talk about his experience in North Dakota.
The next morning I appeared on their show, and they both told me they were blown away by what they’d heard. They’d had no idea about the scale of the American energy opportunity, and said it had completely changed how they thought about the issue.
In the wake of last week’s terrible jobs report, Americans can be thankful about at least one thing: in Mitt Romney, they have one candidate for president who gets it, and who will let American energy go to work creating American jobs.