A New American Energy Revolution

Natural Gas Net Supply

America is engaged in what we do best—adapting to change, responding to opportunity and meeting challenges head-on.  While the recession is technically over our pain lingers with slow economic growth with much uncertainty and rising inflation risk on the horizon but America is slowly going back to work.  Housing and government spending still seems out of control but there are green shoots of hope from the results of the 2010 Congressional elections that solutions to these problems are possible. America’s appetite for change to face these problems is growing to meet our own sense of renewed optimism.

We look around the world today and count our blessings re-learning some important lessons from our near-death economic and geopolitical experiences of recent years.

• America is still an exceptional nation and remains the essential partner of the world. We realize from the geopolitical and economic problems and natural disaster we’re facing that America remains the ‘essential nation’ for solutions to major world problems and we have nothing to apologize for pursuing our own strategic interests in those global issues.
• America cannot lead from a position of weakness. We realize that there are huge risks to America’s strategic interests from allowing a vacuum to exist in American power and influence. We cannot let our own government diminish either our economic strength, capacity to project American power, or our ability to play decisive leadership roles around the world without also reducing our own national security.
• International cooperation is good if it serves America’s strategic interests.  America’s ability to project power into trouble spots often entangles us in conflicts that are not easily or quickly resolved. We should work cooperatively with other nations and international bodies but we expect our government to advance and not subordinate America’s strategic interests to them.
• America is resourceful, adaptable, innovative and still optimistic about the future. We learned that we can take the body blows of the ‘Great Recession’ and come back stronger.  We learned that our fundamental values and belief in our rule of law can easily slip away through government encroachment.
• America needs a Government that enables our potential not restricts it. We have realized, yet again, that a government that tries to do everything, control everything, dominate the markets, pick winners and losers, and intrude into our personal choices is not serving our best interests and not living into our values as a nation. The genius of America has always been the collective power of people working work, under the rule of law, to live into the value of our Founders and create the America dream for themselves and their families.  The collective strength of millions of dreams come true is what has made our nation great, strong, and the only place on earth that people want to ‘jailbreak’ into!

America’s new revolutionary spirit is focused on harnessing our strengths, values and potential once again to reinvest in the American dream, gain global competitive advantage by our economic and market strength, and use that leverage to play the global leadership role the world needs to recover and growth alongside us.  And that is the most important lesson of all isn’t it?

Yes We Can!

And we don’t need to wait for the government’s permission to start living the American Dream again either, do we? You see signs of the new America Revolution everywhere:

1. Disruptive Technology for Non-OPEC Domestic Energy Production. Tired of Importing Oil? American technology has unleashed a revolution in domestic energy production from unconventional oil and natural gas plays that is turning the energy industry on its head and turning America into a powerhouse of global energy production. American technology for horizontal drilling and hydraulic fracturing enables the economic extraction of oil and gas from shales not just in America but worldwide.  This is the single largest threat OPEC has ever faced and there is nothing oil exporting countries can do to stop it.  America’s policy goal should be to  break the back of OPEC oil, Russian natural gas cartels and the dominance of national oil companies that manipulate the markets for good by pursuing our own strategic interests in expanding domestic oil and gas production and licensing our technology to enable other nations to do the same.
2. Re-Fueling Transport to Reduce Emissions and Oil Imports. The advances in hybrid electric-gas vehicles is profound and combined with several policy changes could revolutionize transport and achieve twin policy goals of reducing dependence upon foreign oil imports and reduce emissions. While much of the attention is on PHEV today, battery technology is still immature.  We can get immediate pay-off by expanding sales of gas-electric hybrids right now to accelerate the conversion of the commuting car fleet.  Forcing auto manufacturing to install a low-cost flex fuel capability so other vehicles could use ethanol and other flexible fuels provides added flexibility and would encourage the growth of non-corn based ethanol and algae fuels.  Third we should accelerate the conversion of trucks and other fleet vehicles to natural gas or other flex fuels to further reduce oil imports and emissions.
3. Green Building and Efficiency Codes—Go National! Green building and appliance efficiency codes have proven that it is cost effectively possible to reduce energy intensity and improve energy efficiency.  California’s energy intensity is 50% of the national average today as a result.  Adopting similar codes on a national basis would extend these energy efficiency savings to the rest of the county and make a market for efficient appliances, electronics and services.
4. Charge FERC with National Energy Strategic Planning. Instead of letting K Street define national energy policy by lobbying and campaign contributions we should fix responsibility and authority in FERC to develop national energy strategies based upon ‘lead cost, best fit’ competition between supply and demand options to assure electric power reliability, fuel diversity and supply reliability, and transmission access, grid security and wholesale market competitiveness. My proposal would also shift all environmental rules and permitting involving energy facilities from EPA to FERC.  It would transfer authority for energy productive use of Federal lands from the Department of the Interior and Bureau of Land Management to FERC. Using the established wholesale market rules and evidentiary process with clear authority for FERC to make decisions in the oil and gas, electric power, transmission and energy efficiency codes areas would produce better policy, better consensus building and better results.
5. Balancing Environmental, Economic and Public Interests in Environmental Regulation. We need an environmental regulatory process that forces the parties to proposed rulemakings, settlements and permit disputes to negotiate their differences and come to a reasonable, prudent settlement that balances the public interests with the private interests.  The answer is to impose a standard of reasonableness that forces the parties to own their own burdens and uses an administrative law judge to reasonably balance the public interest in the environment with the business and economic interests of parties to use their property and access to resources in making recommendations to the regulatory authority.  Doing so would produce faster, better environmental results, better resource outcomes and better serve the public interests.

These actions would unleash a new wave of investment in America’s energy infrastructure and create a low-cost, reliable market for new industrial production here in America.  If Congress supports such actions with tax policies that encourage repatriating investment and earnings, keeps America competitive in corporate tax rates and reducing the perverse incentives for outsourcing America will roar back to economic life and the world will be better for it.

Related Articles

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• Snatching Energy Security Victory from the Jaws of Energy Distruption Defeat (insightadvisor.wordpress.com)
• Power grab: FERC, fairness and the future of transmission (thehill.com)
• Jeffrey Rubin: Only A Recession Can Deliver Obama’s Energy Targets (huffingtonpost.com)