America suffers.
America has plenty of energy, but we send hundreds of billions of dollars a year overseas to buy energy we could be producing domestically. This raises energy prices at home, forcing companies to shift jobs overseas. In one recent small business meeting American Solutions hosted in Akron, Ohio, manufacturers cited rising energy costs as a major reason for laying off workers, downsizing operations, and in some cases closing factories.
Washington elites have artificially restricted American energy resources, ranging from a 25-year ban on offshore drilling (which was recently overturned formally but remains active in practice) to an unofficial ban on the expansion of nuclear energy to the encouragement of frivolous environmental lawsuits. The result has been an energy crisis created by environmental extremists, politicians, and bureaucrats who, for ideological reasons, favor high energy prices and severely limited energy consumption. They are willing to pay for this policy with foreign imports, killed American jobs, and substantial American reliance on foreign dictatorships. The vast majority of Americans—79 percent in an American Solutions survey—oppose this policy.
Ironically, many left-wing politicians advocate energy independence even as their own policies sabotage that goal. In fact, every U.S. President since Richard Nixon has rhetorically championed American energy, yet in the past thirty years we have become increasingly dependent on foreign energy.
It doesn’t have to be this way. Contrary to popular belief, America has more energy than any other nation on earth. All that’s keeping us from becoming energy independent is a lack of political will to do so.
Rather than picking winners and losers or paying off some industries by taxing others, our elected leaders should craft an energy policy based on a clear set of choices:
• Do we value prosperity and happiness or punishment through taxes and regulation?
• Do we value national independence, or are we willing to remain vulnerable to blackmail from energy dictatorships like Saudi Arabia, Iran, and Venezuela?
• Do we prefer to keep our money here in America to create jobs and increase our standard of living, or are we comfortable sending hundreds of billions a year to foreigners for energy we could be producing here at home?
In an America that values both prosperity and happiness, both national security and the environment, we can have more energy and a stronger economy while protecting the environment. Indeed, a growing economy requires affordable and reliable energy, which means more energy consumption, not less.
In contrast, in an America that values punishment through taxes and regulations, you will find high energy prices, less energy, and less economic growth.
Blessed with enormous energy reserves, America also has the scientists and engineers who could create unprecedented technological breakthroughs in all our energy sources. We must begin encouraging energy innovation, not discouraging energy production. As this chapter will show, we have both the resources and the capability to rapidly become energy independent.
OIL AND NATURAL GAS
America has more oil and natural gas than most people can even imagine. Unfortunately, our own politicians won’t let us use huge reserves of it.
Offshore we have an estimated 86 billion barrels of oil and over 400 trillion cubic feet of natural gas, all of which was illegal to develop until Congress and the president let their offshore drilling bans expire amidst spiraling gas prices in 2008.
Onshore we have billions more barrels of oil, including potentially more than a trillion barrels locked away in shale in the Rocky Mountains. The Green River Formation in Colorado, Utah, and Wyoming is considered the largest shale oil deposit in the world, with an estimated 800 billion barrels of oil, or three times the proven reserves of Saudi Arabia.1 But nearly all those deposits are unused, since federal law bans most drilling for shale oil.
We also have so much natural gas that even many industry experts cannot develop a top-end estimate. In addition to the hundreds of trillions of cubic feet located offshore, we have exponentially more locked away in ice. Known as methane hydrates, this frozen form of natural gas could make an enormous contribution to our energy independence: we have over 300,000 trillion cubic feet. To put that in perspective, if we could harness just 1 percent of that energy, we could satisfy America’s natural gas needs for more than 100 years.
And there is every reason to believe we have even more oil and natural gas. Methods of finding and developing these resources have become much more efficient even in the past ten years, resulting in the discovery of billions of additional barrels of oil and hundreds of trillions of additional cubic feet of natural gas. Consider:
• Geologists recently had to increase their estimate of oil in the Bakken Formation in North Dakota and Montana by an astounding 2,500 percent.
• BP’s recent discoveries of up to 6 billion barrels of oil and natural gas in the Gulf of Mexico rank among the largest such discoveries in American history.2
• The U.S. Geological Survey reported in 2009 that the Arctic Circle and the Chukchi Sea near Alaska could hold as much as 13 percent of the world’s undiscovered oil and 30 percent of the world’s undiscovered natural gas.
• The Marcellus Formation, a shale deposit rich in natural gas stretching from New York to Ohio, was estimated by the U.S. Geological Survey in 2002 to have approximately 2 trillion cubic feet of natural gas. In 2008, professors at Penn State and the City University of New York, Fredonia, raised the estimate to an astounding 500 trillion cubic feet or more.3
The new estimate at Marcellus is a good example of the power of technology. About eight years ago, engineers applied deep sea drilling techniques to natural gas exploration—they had learned how to drill down 8,000 feet and then drill out horizontally four miles in every direction. Suddenly small pockets of shale gas became commercially viable, because you could find many pockets from one well. This new technology will revolutionize natural gas availability in the United States and possibly in Europe.
The potential for American jobs and American prosperity, however, is being delayed by regulations and litigation specifically designed to stop energy development.
Following the gasoline price spike of 2008 and American Solutions’ “Drill Here, Drill Now, Pay Less” petition drive, public anger forced politicians to allow the bans on offshore drilling to expire. But last year, Secretary of the Interior Ken Salazar delayed leasing in the Outer Continental Shelf by extending a comment period for six additional months. That period ended in September 2009, but as of this writing the Department of Interior has still not released the tabulated results of the public comments, another stalling tactic used by the Obama administration to thwart the will of the American people.
Solutions for More American Oil and Natural Gas
• Stop bureaucratic delays. Congress should cut off all funding for the Department of Interior until that bureaucracy stops ignoring the American people and allows offshore energy development.
• End the ban on oil shale development in the American west. It is unacceptable that we have three times the amount of oil as Saudi Arabia but continue to send the Saudis billions of dollars for oil because we have banned responsible development in America.
• Give coastal states federal royalty revenue sharing. States such as Wyoming with land-based oil and gas projects earn 48 percent of federal royalties from those operations, while most coastal states get zero federal royalties from offshore development. The prospect of earning billions in new revenue would provide coastal states with a strong incentive to accept new offshore drilling with appropriate environmental safeguards.
• Finance cleaner energy with new oil and gas royalties. Allowing offshore drilling would also generate billions in federal royalties, which could help finance renewable projects and other technologies like carbon sequestration for coal.
COAL
America has roughly 27 percent of the world’s coal supply, the most of any nation. We have 1.5 times as much as Russia, whi
ch has the second largest reserves, and twice as much as China. Our reserves can last us for another 200-250 years, and that estimate assumes zero technological innovation over the next two centuries. Furthermore, Alaska may hold more coal than the entire lower forty-eight states combined.
America unquestionably has tremendous potential for a coal-based energy supply whose development would create thousands of new jobs and cut the cost of electricity. But in order to realize that opportunity, we must use coal in a smart, environmentally responsible way.
Encouraging coal power also means developing and expanding clean coal technologies, including carbon sequestration, gasification, and conversion to liquid fuels. These may sound like pie-in-the-sky concepts, but several of these technologies are already available. For example, carbon capture technology is taking root around the world, and America has several demonstration plants in West Virginia, Ohio, Alabama, Washington, and Kentucky.4
Even the U.S. Department of Energy had a carbon capture demonstration project in Mattoon, Illinois, known as FutureGen. Were it not for bureaucratic delays that effectively stopped the project, the United States would today have the finest clean coal demonstration project in the world. It’s now being restarted, but only after we lost ground to the Chinese, who have an aggressive clean coal program.
For decades in west Texas, oil companies have been using carbon dioxide to extract more oil from older fields in a process known as enhanced oil recovery, or EOR. The carbon used in this process is then locked into air tight underground basins, taking carbon out of the air and giving us more American energy.
Gasification, which breaks down coal into its basic chemical elements while producing electricity, is used commercially in the United States and abroad. Allowing for easier capture of carbon dioxide, many gasifiers also can produce hydrogen, which in turn could be used to develop new fleets of hydrogen vehicles. Our own Department of Energy also has a coal gasification research and development program.
Converting coal to liquid fuels (CTL) would lessen our dependence on foreign oil for our vehicles. Rather than burning coal as in a traditional plant, CTL technology either gasifies or liquefies coal, and the product can then substitute for oil. South Africa has used this technology to fuel many of its vehicles for decades.
Although coal provides half of our electricity and is a big reason why so many Americans have reliable and affordable power, it is vilified by radical environmentalists. However, shutting down coal plants, as they often advocate, would not solve any substantial environmental problems, but it would literally turn off the lights on millions of Americans and drive millions of jobs abroad.
Nevertheless, the crusade against coal continues. Consider these examples:
• Dr. James Hansen, a top NASA scientist, is a leading anti-coal advocate who supports prosecuting oil companies for alleged crimes against humanity. He has also called for halting production of any more coal plants, and was even arrested while protesting coal operations.5 Yet we pay his salary as a public servant as he advocates bankrupting millions of Americans.
• In 2008, Democratic congressman Henry Waxman, now chairman of the House Energy and Commerce Committee, endorsed a moratorium on all proposed coal plants.6
• Barack Obama, while campaigning for president, told the San Francisco Chronicle his energy plan would bankrupt the coal industry.
• The Environmental Protection Agency recently cancelled a permit it had issued for the Spruce coal mine in West Virginia, despite previous positive assessments by the state, the Army Corps of Engineers, and even the EPA itself.
Rather than attacking the coal industry through regulation and taxation, a more sensible approach would encourage coal operations through innovative technologies including carbon sequestration and even gasification. Rather than limiting the supply of American energy, we can expand it while also encouraging technological breakthroughs among our brightest scientists and engineers.
Solutions for More American Coal
• Accelerate the FutureGen clean coal demonstration plant. The fact that America was on pace to beat China on clean coal and then suddenly fell behind due to bureaucratic incompetence is shameful and unacceptable. Congress and the Department of Energy should work together with industry to fast-track FutureGen’s completion.
• Encourage retrofitting of existing plants with CCS. Congress should develop a tax credit for any energy company that retrofits its coal plants with carbon capture and sequestration (CCS) technology.
• Incentivize new technologies and innovations with coal. Congress should approve a series of tax-free prizes for major new innovations that will allow us to use coal in cleaner and more efficient ways.
NUCLEAR
Today, America gets about 20 percent of its electricity from our 104 nuclear power plants, which provide massive amounts of around-the-clock, safe, pollution-free power. According to the Nuclear Energy Institute, we are going to need at least thirty-five more nuclear plants just to meet the projected increase in electricity demand by 2030.
This is a bold challenge, as the United States has not licensed and built a new nuclear plant since the 1970s. But, once again, the problem is not the energy companies. Instead, government regulation and frivolous lawsuits are stifling construction of new plants.
If we value affordable, clean, and reliable energy, then nuclear power must be part of the solution. Wind and solar are clean forms of energy, but they are not yet affordable solutions, nor are they reliable, as the sun is not always shining and the wind is not always blowing. To have reliable base load electricity, nuclear power, along with coal, must be a major supplier for the next generation or even longer.
Despite the horror stories, nuclear power is incredibly safe. The Nuclear Regulatory Commission closely monitors each plant to guarantee all operations meet the highest standards, including worker safety. From 2000 to 2007, the average accident rate for workers in nuclear plants was miniscule—less than 0.2 accidents per 200,000 workers.
As for radiation, the National Cancer Institute determined that nuclear plant workers do not face an elevated risk of dying from cancer. Ideological extremists who oppose nuclear power would have us believe that anyone living near a nuclear plant faces enormous health risks from plant radiation. But if the workers themselves do not face elevated risks, why would residents living miles away?
In fact, nuclear plants are so well-designed that, for people living near the plant, only about 1 percent of their radiation exposure comes from the plant. The rest comes from the sun and from naturally occurring radiation in the environment.
Countries worldwide rely on nuclear power because it’s safe and it’s more reliable than any other form of clean energy. Since the 1970s, Japan has built dozens of new plants, and France has built even more. In fact, the French get 75 percent of their energy from nuclear power. If the United States matched that percentage, we would pump 2.2 billion fewer tons of CO2 into the atmosphere every year.
And the future of nuclear power will be even safer, more affordable, and more reliable. Companies such as Hyperion Power Generation, Babcock & Wilcox, and NuScale, Inc., are developing smaller reactors that could fit in a large meeting room. These advanced small modular reactors (or ASMRs) could power 25,000 homes each, while requiring a fraction of the initial capital costs of a big nuclear plant.
These reactors could also be exported to developing countries that struggle to find reliable sources of electricity. Countries across the globe, including Japan and South Africa, are developing this technology, and our own Department of Energy has recognized its potential.
Our American energy policy must encourage all forms of nuclear power. As with any other product, if the government stifles innovation of modular reactors, America will not produce them, which means fewer exports and fewer American jobs.
Solutions for More American Nuclear Energy
• Create a streamlined regulatory and tax regime. It’s time government bureaucrats and anti-nuclear po
liticians recognize the safety of nuclear power with less burdensome regulations on this vital power source.
• Incentivize safe disposal and reuse of waste. Congress should pass prize legislation that would reward any company that develops safe storage or improved recycling technology.
• Recognize small modular reactors. The Nuclear Regulatory Commission should conduct more research into modular reactors and establish a consistent system for permitting this advanced technology with minimum paperwork and minimum regulatory costs.
RENEWABLES
Contrary to what proponents of new energy taxes would have us believe, those of us who favor more American energy are not opposed to renewables such as wind and solar power. In fact, these technologies must be part of any real American energy plan to achieve energy independence.
Although we currently get less than 1 percent of our electricity from wind power, it has enormous potential. One study from Stanford University found that North America has the greatest potential for wind power in the entire world, due primarily to the powerful breezes around the Great Lakes and on the coasts. This clean, renewable energy has no carbon emissions.
Solar power also has great potential. The American southwest already has numerous solar projects, as well as proposals for new ones. Meanwhile, advances in solar panel technology are allowing many homebuilders to generate their own electricity by placing panels on their roofs. In fact, the southwest has so much sunlight that if companies constructed a series of solar plants covering 100 square miles, those plants could generate as much electricity as all the fossil fuel-fired plants in America.7
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