Policies Should Encourage – Not Restrict – Production
Twenty years ago, American oil and natural production was declining as imported OPEC supplies continued to swamp world energy markets. Thirty years before that, America’s entire economy was held hostage as those imported supplies were cut off amid conflict in the Middle East. Many alive today can still remember the fuel oil rationing, the long lines for buying gasoline, and the decade-long economic stagnation caused by OPEC’s 1973 oil embargo.
American Energy Revolution
But the rise of American shale production has completely changed the game. At AXPC, we correctly call it the “American Energy Revlotiuon.” It’s the kind of economic revolution that benefits every American family, every business, and every industry. America’s energy abundance is brought to bear in the form of historic economic growth, resurgence of our manufacturing sector, and lower overall energy costs.
Amazingly, as America has risen to become the world’s leading producer of oil and natural gas, it has also become the leader in reducing emissions. Expanded shale production has led to cleaner, more reliable, and more affordable domestic energy supplies and has benefited Americans in ways we most couldn’t have anticipated. A recent news report in the Financial Times make this point abundantly clear.
Shelter in a Storm
Titled, “How US shale keeps sheltering America from the next oil price surge,” FT cites several recent overseas energy market disruptions that should have shaken Americans and the global energy landscape – but didn’t. These include the first-ever military strikes on Israel by Iran and the possibility of strikes in the Strait of Hormuz, the imposition of sanctions on Russia and Venezuela, Russia’s 2022 invasion of Ukraine, and the 2019 drone bombing of Saudi Arabia’s Abqaiq oil-processing facility.
Any one of these incidents alone should have thrown markets into paroxysms. But as the report shows, “The crude price calm in the face of this turmoil owes much to events 7,000 miles away in the shale fields of North Dakota and west Texas, where drillers have left global markets awash with American oil.” Energy, produced by America’s oil and natural gas companies, gives the US the flexibility to work quickly to re-balance world markets and provide stability.
More US Production, Less Importation
As ample supplies of American oil and gas have entered markets since the late 2000s, the U.S. has dramatically reduced our reliance on foreign oil imports. The FT chart below shows clearly demonstrates the “flip” in importation and production:
No Longer Held Hostage
While it is true the US still imports oil and some natural gas, the expansion of shale energy has greatly reduced America’s vulnerability to the economic risk of extortive, foreign energy policies. No longer should we be exposed to disruptive embargoes or bans. America’s risk in this regard is lower than any generation since the World War II-era.
A Simple Choice
Our nation’s energy is a matter of answering the question “how much can we produce here in America?” The more we produce here, the more secure and prosperous we are at home and abroad. It’s not complicated. Instead of energy restrictions, policymakers in Washington should support policies that encourage development and sustain the American Energy Revolution.