Many facets of the American economy are thriving, from rising employment to growing consumer spending. Despite those encouraging signs, one sector always has had the potential to be more unpredictable than ever before: energy.
As one analyst recently concluded, “Political and economic events are shaping the oil market in [ways that they have not been] shaped for quite some time. […] The number of uncertainties surrounding the global supply (and) demand balance is growing almost by the day.”
The good news is that U.S. oil and natural gas production are at an all-time high. Modern drilling techniques and the growth of public-private partnerships have allowed the industry to capitalize on the recent shale boom, too.
Yet, gas prices continue to rise, with the national average cost of a gallon of gas equaling 60 cents more than last July.
Although increasing gas prices cannot be attributed to any one cause, a contributing factor is undoubtedly the infrastructure shortage currently facing the U.S. Simply put, the energy industry does not operate in a vacuum. Its influence is widespread, spanning across many facets of American society that benefit from reliable access and affordable prices.
Paired with the vast natural resources at our disposal, enhancements to our critical energy infrastructure can create well-paying jobs, render millions of dollars in tax revenue for municipal services, and most importantly, provide a safe, efficient method of transportation for vital energy products.
American natural resources play an important role not only in the domestic sphere but also with regard to international relations.
As of March 2017, U.S. net imports of petroleum from foreign countries made up about 19 percent of U.S. petroleum consumption, the lowest it has been since 1967. With the current record domestic energy production, a strong energy market can bolster the United States’ position in foreign policy matters.
Take, for example, the U.S. ban on shipments of oil from Iran. Abhishek Kumar, senior energy analyst at Interfax Energy, believes “the upcoming sanctions on Iran provide a golden opportunity to commercialize more U.S. oil in the Indian market. Escalating trade tensions between the U.S. and China will also be conducive to more U.S. [products] coming to the Indian market.”
The United States, however, only has one export terminal large enough to accommodate 2-million barrel supertankers. This is just one tangible, current example of U.S. energy potentially having a major influence on the global economy, and the limitations posed by a shortage of infrastructure. The United States’ position continues to strengthen as the country’s role as a producer grows, but it will be hindered as long as the infrastructure gap persists.
You don’t have to look all the way across the world to see American energy at play, though.
The U.S. exports petroleum to a number of nearby countries, including Mexico, Haiti, Honduras, and El Salvador. Some underdeveloped countries depend entirely on U.S. imports to fuel their energy needs. In turn, making energy products more accessible and affordable encourages importers to promote energy security and strengthen their own infrastructure.
And these investments offer an opportunity to bolster our safety and security right here at home. Pipelines are undoubtedly the safest method of transporting energy products. In fact, pipelines safely deliver oil 99.999 percent of the time, according to a 2017 report by the Association of Oil Pipelines and the American Petroleum Institute.
The alternatives, trucks and trains, run a much higher risk. In Minnesota, for example, trains regularly carry anywhere between 16.5 million to 23.1 million gallons of Bakken crude oil across 700 miles of railroad. The state’s Department of Transportation has underlined that the “presence of these full trains of flammable material also poses a threat of a catastrophic fire in the event of a derailment and rupture of some of the tank cars.”
Even with the industry’s impressive safety record, activist groups continue to staunchly oppose pipeline development without regard for the numerous benefits they provide. Many of these groups have prioritized an unrealistic anti-fossil fuel approach rather than actually focusing on the facts.
Pipelines undergo a rigorous permitting process and are subject to federal, state, and local regulatory agencies. Expanding critical energy infrastructure and promoting environmental conservation are not mutually exclusive.
A robust energy market with strong infrastructure provides a solid backbone for U.S interests at home and abroad. We must continue to promote energy development, guarantee regulatory certainty, and protect critical investments in our infrastructure.
James “Spider” Marks is a retired U.S. Army major general and president of the Marks Collaborative.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.