U.S. gas production helps fight climate change
At the United Nations Climate Summit, President Barack Obama reiterated his call for concerted action to combat “the urgent and growing threat of climate change.” Yet public opinion remains sharply divided.
People are worried that policies designed to reduce carbon-dioxide (CO2) emissions through arbitrary diktats from the federal government will further damage job and wage growth. They’re right.
The president’s call for action entails an expanded federal bureaucracy dictating to industry experts which technologies are viable, and which technologies are unviable.
Top-down planning schemes that arbitrarily choose one power source over another inevitably causes slower economic growth and greater economic volatility. But this does not mean that Obama’s dream of falling CO2 emissions is unachievable.
Ironically, expanding the use of a fossil fuel is already driving down CO2 emissions in the U.S.
In 2012, total U.S. annual carbon emissions were the lowest they’d been in two decades. They’ve dropped 12 percent since 2005.
One of the drivers of the reduction in CO2 emissions in the United States is the growth of natural gas as an energy source. In fact, the federal government’s Energy Information Agency cites historically low natural gas prices as a key reason that CO2 emissions have declined.
Natural gas is one of the lowest emitters of CO2 compared with other traditional energy sources — and at current prices, natural gas produces energy at competitive prices. Expanding America’s natural gas operations promotes robust economic growth while also having the impact of lowering U.S. CO2 emissions.
Natural gas production creates jobs and expands economic opportunity at a time when other sectors of the economy continue to struggle. The U.S. energy industry is responsible for 9.8 million jobs, paying $200 billion in wages to American workers. Indeed, with supportive policies, the oil and gas industry is predicted to create an estimated 1 million new jobs by 2025.
The government also benefits from a vibrant energy sector. Every day, the energy sector contributes $85 million to the government’s coffers in taxes, royalties, rents and bonus fees.
Despite this success story, the Obama administration and many in the environmental movement remain deeply hostile to increased natural gas production. They have created a regulatory environment in which compliance costs are jeopardizing new investment.
According to the Wall Street Journal, “in general every $1 billion spent complying with an (Environmental Protection Agency) rule threatens 16,000 jobs and cuts GDP by $1.2 billion.”
In addition, the Obama administration has retained oppressive restrictions on natural gas exports, making it very difficult for domestic producers to sell their surplus gas in foreign markets. These export rules hamstring further industry expansion.
Effective energy regulation bolsters, not smothers, innovative products and technologies that offer consumers affordable clean energy sources — regardless of whether it is a fossil fuel, current alternative technology, or even a new technology that is not yet commercially viable.
A technologically neutral regulatory approach that neither promotes nor discriminates against any energy source would fulfill Obama’s promise to implement an “all of the above” energy strategy.
Natural gas offers a low-cost, low-carbon alternative to other energy sources. The Obama administration needs to stop inhibiting this efficient resource.
Wayne Winegarden is senior fellow at the Pacific Research Institute and a partner in the consulting firm Capitol Economic Advisors.
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