5 energy policy solutions to grow economy
President Obama recently delivered the first State of the Union Address of his second term. While the President scratched the surface of a needed conversation on the nation’s energy policies, much remains to be discussed. After all, our nation’s energy policy is the lifeblood of our economy and as such has a large impact on our nation’s consumers and businesses.
The good news is that the state of the U.S. consumer is resting on a strong foundation. Thanks to new technologies (namely horizontal drilling and hydraulic fracturing), U.S. oil production is at its highest level in 20 years, the U.S. is now the world’s largest natural gas producer, and wind generation capacity reached a record 13,000 megawatts installed in 2012. As Consumer Energy Alliance predicted last year these developments could enable the United States to become energy self-sufficient within the decade.
Taken together, this has improved U.S. energy security and provided a foundation for our economic recovery. Thanks to the abundance of natural gas wholesale electricity prices have dropped by 50 percent since 2008. This is leveling the playing field and bringing manufacturing back to areas of the U.S. – like the Rust Belt states of Pennsylvania and Ohio. Developments like these led Massachusetts Congressman Ed Markey to declare “This is one of the five best story lines of the 21st century for America.”
However, don’t pop the champagne just yet as many challenges lurk in the background. For example, our energy infrastructure is struggling to keep up with supply, new federal proposals could derail our progress, interest groups are attempting to halt continued development and we are essentially flying blind as a national energy policy remains elusive.
Given this, reasonable and responsible federal policies, such as the ones below, should be implemented to ensure our energy abundance, and benefits the U.S. consumer, continue to advance.
Approve a National Energy Policy: Due to a lack a clearly defined national energy policy this activity has essentially been forced to the hands of federal regulators. This imperils the short- and long-term availability of dependable, affordable energy for consumers and thus threatens our continued economic advance.
Make Needed Infrastructure Improvements: Quite simply, the nation’s ability to produce energy is exceeding our capacity to distribute it. There is a glut of oil in Oklahoma, our ability to get natural gas to market is constrained and new renewable energy sources are often far from population centers. Therefore, we should immediately approve the Keystone XL pipeline, advance natural gas pipeline permits expeditiously and support a build-out of electrical transmission infrastructure.
Streamline Federal Permitting: The approval timeframe for a federal application to drill an oil or natural gas well increased to 307 days in 2011. In many states, this process takes less than 30 days. The federal government should streamline the permitting process to improve the efficiency of the permitting system, reducing the risk for litigation, and improve transparency.
Support Energy Efficiency Programs: Increased energy efficiency and conservation can lead to significant cost savings for American consumers and make American businesses more competitive. The federal government should continue to support programs such as ENERGY STAR or NextGen that responsibly encourage efforts to adopt more energy-efficient technologies and behaviors.
Expand access to oil and natural gas and increase R&D for renewable energy: Simply allowing greater access to oil and natural gas resources could generate an additional $1.7 trillion in government revenues. The Department of the Interior should issue a new Five Year Plan that includes annual leasing in the Mid-Atlantic, South Atlantic and Eastern Gulf of Mexico. At the same time, we should better allocate federal support to wind and solar energy to determine ways to increase competitiveness in the marketplace.
Implementing these solutions will result in significant economic advancements as nearly every sector of the economy relies on affordable energy to transport its goods and services, power its facilities, and manufacture its products. Focusing on solutions, avoiding false choices, and empowering our most innovative energy companies will help us reach our true potential but first the federal government must provide a stable landscape for this development to occur.
David Holt is president of the Consumer Energy Alliance.