Energy equals activity. Put another way, energy powers the engine of growth. But just like a poorly-tuned engine can sputter along, no matter how good the gasoline we put in, other forces can slow economic growth even when the energy sector is booming.
That’s what’s happening, according to economist Mark J. Perry, who is writing for Investor’s Business Daily.
“It would be easy to look at the dramatic 35 percent increase in America’s oil and natural gas production since President Obama took office and think the administration deserves much of the credit,” Perry writes. “But the energy boom has happened in spite of him. Production could have been even greater if the administration embraced America’s new energy superpower status instead of being so hostile to the development of our fossil fuel resources.”
The current administration should get no credit at all for the boom.
“Since Obama took office, oil and gas production has soared on private and state land, for which he deserves little or no credit,” Perry observed. “Meanwhile, production on federal lands has dropped sharply due to a cutback in leasing of deepwater areas for energy development. The U.S. government leases less than 2.2 percent of the energy-rich Outer Continental Shelf, and less than 6 percent of federal onshore lands. Offshore leasing is at half the level recorded during the Clinton administration, and its decline is indicative of Obama’s hostility toward the oil and gas industry.”
Nevertheless, that industry has fueled a recovery much more real than anything Obama has tried to sell the American public.
“To grasp the significance of the shale oil boom, the ramp-up in production from 5 million barrels a day in 2008 to 8.5 million barrels this year amounts to a whopping 70 percent increase,” he noted. “That 3.5 million-barrel-per-day increase alone is larger than the output of all 12 OPEC countries except Saudi Arabia. It has energized the U.S. economy, created hundreds of thousands of jobs, produced savings for consumers and strengthened America geopolitically.”
How could the Obama administration open up the throttle on the boom, instead of choking it down? Simple — by letting more U.S. companies sell natural gas abroad.
“Clearly, with U.S. natural gas resources projected to last more than 100 years, Europe and Asia are eager to buy our liquefied natural gas,” Perry wrote. “Exports would serve a double purpose — incentivize countries with fast-growing economies like China and India to switch from burning coal to lower-carbon natural gas, while also reducing Europe’s costly reliance on Russia’s natural gas. But instead of seizing the opportunity, the Obama administration continues to slow-walk export licenses for liquefied natural gas.”
Aside from the environmental benefits of allowing more natural gas sales, there are jobs to be considered — thousands of jobs, according to Perry.
“By neglecting America’s new abundance of hydrocarbon resources and limiting development on federal lands, he is preventing the country from reaching its full economic potential,” Perry said.
The energy sector is humming along despite the Obama administration. But with a little cooperation, it could really roar.