U.S. economy could choke on Obama’s energy “chunks”

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Democrats — vanquished yet still powerful — have hinted at several bi-partisan-to-be proposals, such as finding “middle ground” with Republicans on energy policy. Yet, despite giving post-election lip service to truly bi-partisan pursuits like natural gas development, the White House and Democratic leadership are already working on other ways to “skin a cat” in pushing their agenda to pick winners and losers in the energy sector.

Prior proposals to implement a national cap-and-trade system have proven to be a non-starter not only on Capitol Hill, but also for the American citizenry. Given these failed attempts, the Obama administration is now turning to its Environmental Protection Agency (EPA) to impose significant restrictions on carbon emissions. Some congressional Democrats are also seeking to appease the alternative energy lobby by instituting a national renewable electricity standard (RES), a mandate that fails to account for both the diverse nature of America’s electricity generators and unique nature of regional power demands. These backdoor solutions to rejected policies offer cause for concern.

EPA’s march to regulate greenhouse gas emissions — overriding what should have been legislative provisions formulated by elected officials with regulations enacted by activist bureaucrats — is not only economically-harmful, but also irregular and perhaps illegal. Its recent activism has resulted in unilateral and arbitrary policymaking that affects virtually every U.S. business and consumer. Especially given our economy’s sluggish recovery, EPA’s costly proposed regulatory regime, and its accompanying expansion of the size and reach of the government, is the last thing we can afford.

Given the technology currently available, renewable energy sources like solar and wind will never account for more than 1% of world energy demand without massive government hand-outs; it is thermodynamically impossible. Fossil fuels will dominate the global energy landscape for decades, definitely well after this century. China and many other developing nations know this all too well. In fact, over the last few years, we have witnessed the largest transition of power in peaceful times. This is because energy means power, and the Chinese are securing oil and gas resources the world over.

Even with cap-and-trade legislation now dead (yes, really this time), these backdoor approaches to imposing a similar agenda would amount to economic hara-kiri for the U.S. — negatively affecting our energy supply while devastating our economy, jobs and daily way of life. Surely hard-working Democrats in this country should find a lot in common with hard-working Republicans when it comes to these issues and in protecting what has been the envy of the world: our lifestyle.

What is most ironic about EPA’s proposed overreach is that, while U.S. quality of life has continued to rise, the quality of our air has improved, as well. Even Vice President Al Gore affirmed this, noting:

Throughout our economy, skills, intelligence, and creativity are replacing mass and money — which is why, in the past 50 years, the value of our economy has tripled, while the physical weight of our economy as a whole has barely increased at all.

Relative to other nations, U.S. efforts undertaken to protect the environment have been considerable. From dumping controls and agricultural innovation to scrubbers on power plants and advances in water treatment, very few nations can match America’s commitment to environmental preservation.

It’s an unburdensome regulatory environment, one able to incentivize innovation and investment across the energy spectrum, which has enabled us to achieve such unprecedented personal and environmental quality. It’s this kind of business-friendly environment that has attracted the capital and talent necessary to achieve the breakthroughs which now offer Americans many of the safest, most affordable, and most efficient energy sources available.

Just consider natural gas.

America’s natural gas reserves continue to be revised upward at a quickening pace. It is now projected that vast reservoirs of tight gas — such as the Marcellus in the Northeast and Haynesville in the South — rival the recoverable reserves of the largest natural gas fields in the world, namely Iran’s South Pars field and Russia’s Urengoy.

To access these reserves, the extraction process known as hydraulic fracturing must be employed. “Fracking” — as it is commonly referred to — is an environmentally-safe and efficient method to produce our domestic natural gas; and it has extraordinary economic potential. In fact, a recent study conducted by Timothy Considine illustrates that the Marcellus alone can generate $25 billion in increased economic activity and create more than 280,000 jobs for the U.S. economy.

When Congress returns for its lame-duck session and the president arrives back from Asia, let us all hope our policymakers can form a true, bi-partisan consensus toward comprehensive energy policy: solutions that rebuke regulatory burdens, stimulate our economy and take advantage of America’s abundant natural resources. Anything less will continue Washington’s trend of failed leadership when it comes to our energy and environmental challenges.

Dr. Economides is the editor-in-chief of the Energy Tribune and a professor at the University of Houston.