…The Politics of Energy, Part 2…
Part 1 made it clear the United States has the energy resources needed to counter its enemies and support its allies.
America’s abundant resources are also among the least costly in the world.
“The lower the cost of energy, the greater its effect on economic growth and prosperity.”
But these resources are useless when kept in the ground.
Government Response
Having vast reserves of oil and natural gas is a huge advantage economically and strategically, but it is of no importance if the government establishes regulations that keep it in the ground or prevents it from being transported to where it can be processed and used.
The government’s current strategy, in this regard, is to:
- Forbid leasing on Federally owned land.
- Stifle leasing in the Gulf of Mexico.
- Initiate regulations that inhibit drilling.
- Prevent the building of pipelines.
- Promote costly wind and solar, and electric vehicles to displace the use of cheap fossil fuels.
Lack of supply increases the cost of gasoline, diesel oil, jet fuel, and natural gas, which increases the cost of transportation, the cost of heating homes, and the price of electricity. Anything transported by trucks and rail, such as food, will also see their prices rise.
While the administration’s policies have already curtailed oil output by 1.5 million barrels per day, its most effective policy has been to cancel pipelines.
The Keystone pipeline was stopped on virtually the first day this administration took office, which prevents Canadian oil from safely reaching the United States.
Less publicized, but possibly more devastating in its effect, has been the cancelling of pipelines that would allow natural gas from Appalachia to reach where it can be processed and used. New England, for example, is deprived of natural gas for generating electricity because of the lack of pipelines from Appalachia.
The Mountain Valley and Atlantic Coast pipelines have also been blocked by environmental groups, preventing natural gas from flowing south to where it could be exported.
While some LNG is being exported from the Cove Point terminal in Maryland, the lack of pipelines effectively prevents the vast supply of Appalachian natural gas from ever reaching market.
Without additional supplies of natural gas, especially from Appalachia, increasing LNG exports to allies will increase the price of natural gas for Americans.
Americans will be hurt if we export LNG to our allies, unless we build the pipelines that will open up the huge quantities of natural gas available in Appalachia.
By law, LNG exports must be in the public interest. Politicians could easily conclude that high heating costs are not in the public interest and stop the export of LNG.
Two years ago, natural gas at the Henry Hub was $2.59/MMBTU, while in May, of this year, it was $8.14/MMBTU. It will go higher yet, unless more natural gas is produced.
Pipelines are essential to having sufficient supplies of natural gas for exporting LNG.
Conclusion
The real threat to our country comes from China, not CO2 emissions, yet government net-zero carbon policies now assume the opposite.
Net-zero policies are preventing our vast energy resources from being used, while making the United States dependent on China for materials needed to build windmills, solar farms and batteries.
The war against fossil fuels must be brought to an end.
During WWII, America was the Arsenal of Democracy.
The United States can be the energy powerhouse supporting the free world.
It’s imperative that this three step strategy be implemented.
- The first, and most important need is for the United States to become energy independent again. The added supply of US crude will help lower the cost of energy, including the cost of gasoline.
- The second step is to establish regulations that enable and promote the development and use of our energy resources. Permitting shouldn’t be allowed to prevent or slowdown drilling or the building of pipelines.
- The third component of any energy strategy must to build the infrastructure that supports the development and production of energy resources. Pipelines are essential.
If there is an existential threat to the United Sates, it’s China and its allies, not CO2.
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