USA Today on July 2, 2013, published an article by Steve Forbes on the necessity of focusing on economy. How much longer will we hear empty claims from President Obama, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid that the United States has only 3% of the world’s oil supplies and therefore, “we can’t drill our way out of the problem”?, Forbes asked. The recent increase in domestic oil and gas production is sending shock waves through the global energy economy and is bolstering the USA’s standing among the energy-producing giants in the Middle East. Not only are U.S.-Middle East relations changing in a geopolitical sense, but also economically, as trade balances reflect increasing U.S. energy production. Excerpts below:
According to a recent report from the Energy Information Administration, U.S. domestic crude-oil production in May exceeded oil imports for the first time in 16 years. Moreover, this past February, the U.S. met 88% of its own energy needs — the highest rate since 1986. These milestones are in no small part due to the oil and natural gas boom and improved technologies such as hydraulic fracturing.
But that’s not all. U.S. imports from the Organization of the Petroleum Exporting Countries have decreased more than 20% since 2010 with the International Energy Agency predicting that the U.S. could become the world’s largest oil producer by 2020, and possibly energy independent by 2035.
These developments have considerable implications on U.S. foreign policy. If we continue developing our energy and manufacturing sectors, no longer will the U.S. have to kowtow to dictators of volatile nations for fear of disrupting our energy supply or rocking international markets.
Decreased dependency on foreign oil doesn’t just impact American foreign policy; it also opens the door for the U.S. to no longer send hundreds of billions of dollars each year to countries not always friendly to the U.S. Representatives from OPEC member countries recently complained about the impact of the largely unexpected U.S. shale boom.
Additionally, the shale gas/natural gas boom here at home could spur an energy and manufacturing renaissance that will create thousands of new, high-paying jobs in dozens of states.
Consider the Alaska oil pipeline, which was mired in regulatory limbo for more than five years while bureaucrats scrutinized, litigated and studied its impact. But since its completion in 1977, the Alaska pipeline has delivered more than 16 billion barrells of oil to market, while maintaining an exemplary environmental record.
The Keystone XL pipeline, which would deliver crude oil from a friendly Canada is experiencing similar delays. Under review since 2008, the Keystone pipeline has been studied more extensively than the Alaska pipeline. The delay is not only costing the U.S. cheap energy from a reliable neighbor, but also thousands of good-paying jobs.
The U.S. oil and natural gas boom is drastically improving our standing in the global economy and strengthening our foreign policy might. It can also create a manufacturing boom if Washington gets out of its own way. And Americans want this energy and manufacturing renaissance to occur. A recent Gallup survey showed that 48% of Americans place higher priority on economic recovery and job growth over mandating additional environmental protections.
It’s time for Washington to take heed.
Steve Forbes is chairman of Forbes Media and editor-in-chief of Forbes Magazine.