Secretary Moniz misses the point of an ‘all of the above’ energy policy

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Margo Thorning
Senior Vice President, ACCF
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      Margo Thorning

      Margo Thorning is senior vice president and chief economist with the American Council for Capital Formation and director of research for its public policy think tank. Dr. Thorning also serves as the managing director of the International Council for Capital Formation, a new think tank incorporated in Brussels. The ICCF is an affiliate of the ACCF. In North America, Dr. Thorning has testified as an expert witness on capital formation and environmental issues before various U.S. congressional committees, including the Senate Environment and Public Works Committee, the Senate Energy and Natural Resources Committee, the Senate Commerce, Science and Transportation Committee, the Joint Economic Committee, the Senate Governmental Affairs Committee, the House Ways and Means Committee, the House Commerce Committee, and the House Committee on Government Reform. She recently made a presentation "Investing in Energy and Industrial Development: Challenges and Opportunities" at a UN Commission on Sustainable Development meeting. She also served on DOE's Electricity Advisory Board's Subcommittee on Standards of Conduct and Corporate Practices. She also has testified before the Senate of Canada on that country's proposals for tax reform. Dr. Thorning is an internationally recognized expert on tax, environmental, and competitiveness issues. She writes and lectures on tax and economic policy, is frequently quoted in publications such as the Financial Times, Suddeutsche Zeitung, New York Times, and Wall Street Journal, and has appeared internationally on public affairs news programs. Dr. Thorning has made presentations on the economic impact of climate change policy at forums sponsored by the ICCF in China, India, other Asian countries, the European Union, and Russia. Dr. Thorning is coeditor of numerous books on tax and environmental policy, including "Climate Change Policy and Economic Growth: A Way Forward to Ensure Both" and "The U.S. Savings Challenge: Policy Options for Productivity and Growth." Previously, Dr. Thorning served at the U.S. Department of Energy, the U.S. Department of Commerce, and the Federal Trade Commission. Dr. Thorning received a B.A. from Texas Christian University, an M.A. in economics from the University of Texas, and a Ph.D. in economics from the University of Georgia.

U.S. Energy Secretary Ernest Moniz touted the Obama Administration’s “all of the above” energy strategy Wednesday at the National Press Club. Yet he all but ignored America’s fossil-fuel energy boom, where abundant natural gas and oil resources are being developed.

Secretary Moniz offered no hope of lifting the obsolete crude oil export ban, no indication of accelerating the approvals of Liquefied Natural Gas (LNG) export licenses, and no signal that the Keystone XL pipeline is any closer to approval. The administration cannot pursue an “all of the above” approach to national energy policy by ignoring these three key energy issues.

Secretary Moniz, who knows better, nevertheless spent the vast majority of his National Press Club speech talking about fuel efficiency, renewables, and heavily-subsidized projects.

These issues aren’t inconsequential, but the Secretary entirely brushed over the value of U.S. oil and gas – fuels that are the main source of energy for running our cars and trucks, heating our homes and offices, and powering our factories.  More and more U.S. workers are extracting and transporting American oil and gas every day, such that the industry is a key source of job creation and growth in an otherwise sluggish economy. And these resources are in such abundance now that it makes very good economic sense to allow markets, rather than government bureaucrats, to determine how and where we export them.

Take the ban on crude oil exports. The ban was enacted decades ago in completely different geopolitical and economic circumstances that are simply no longer relevant. The Brookings Institution, a nonpartisan think tank, published a research paper last month urging President Obama to ask Congress to lift the ban on crude oil exports. They wrote: “Domestic consumers do not substantially benefit from an export ban, and U.S. oil producers may soon be affected negatively by it.”

The report concludes that lifting the ban would yield substantial economic and political benefits. In addition, a new study by Resources for the Future concludes that lifting the ban on crude exports is likely to reduce domestic gasoline prices. Yet when Secretary Moniz was asked directly about reexamining the ban, he was noncommittal.

Similarly, he was silent on LNG exports until questioned, and then answered with a recitation of how the license approval process works. The department reviews these applications to determine if they are in the “public interest.” The sluggish status quo, however, is simply not cutting it. There are over 20 applications to export LNG waiting to be approved, some of which have been sitting in the queue for well over two years.

The fact is that recent technological advancement in extracting gas from shale has given us a huge strategic energy advantage. We now have the world’s largest recoverable shale gas reserves, sufficient to meet our domestic needs while enabling us to benefit from exports of LNG as well. Just look to the north in Alaska where, for the first time in decades, the state is poised to tap one of the largest known reserves of natural gas. Thanks to the leadership of Governor Parnell and the state legislature, Alaska is poised to move ahead with a $45 billion pipeline and infrastructure project that will provide the state with plentiful natural gas for generations to come while also establishing it as a world leader in gas exports. Domestic prosperity and LNG exports are not mutually exclusive.

Secretary Moniz proudly cited the recent five-year anniversary of the signing of the American Recovery and Reinvestment Act – an act intended to stimulate the U.S. economy, in part by creating jobs. Why then, does he fail to speak to the thousands of jobs that could easily be created by implementing the right energy export policies?