I recall how in the late 1970s, back during the dark ages of the government-caused “energy crisis,” President Jimmy Carter liked to say that the United States is “the Saudi Arabia of coal.” Yes—there was a time when liberal Democrats were in favor of expanded coal use (unlike today), and Carter’s pro-coal policies led to a significant expansion of coal-fired electricity in the 1980s.
But as usual Carter was too narrow. Turns out the United States might well be regarded as the “Saudi Arabia of oil” as well as coal (not to mention natural gas, about which everyone has caught up to speed). This is the graven of Mark Mills’s terrific new report out yesterday from the Manhattan Institute, Unleashing the North American Energy Colossus: Hydrocarbons Can Fuel Growth and Prosperity. Mills is a pal, from whom I’ve learned more about some of the fine points of energy than anyone else. The point is simple: the United State is a hydrocarbon superpower, and together with Canada and Mexico—no slouches themselves in terms of hydrocarbon reserves—North America could become the dominant hydrocarbon energy supplier for the world. Forget inward-looking”energy independence” (a stupid idea anyway); let’s become an energy export continent. It’s enough to give your average Arab oil sheikh night sweats.
Among Mark’s conclusions:
An affirmative policy to expand extraction and export capabilities for all hydrocarbons over the next two decades could yield as much as $7 trillion of value to the North American economy, with $5 trillion of that accruing to the United States, including generating $1–$2 trillion in tax receipts to federal and local governments. Such a policy would also create millions of jobs rippling throughout the economy. While it would require substantial capital investment, essentially all of that would come from the private sector.
The underlying paradigms embedded in American energy policy and regulatory structures are anchored in the idea of shortages and import dependence. A complete reversal in thinking is needed to orient North America around hydrocarbon abundance—and exports.
In collaboration with Canada and Mexico, the United States could—and should—forge a broad pro-development, pro-export policy to realize the benefits of our hydrocarbon resources. Such a policy could lead to North America becoming the largest supplier of fuel to the world by 2030. For the U.S., the single most effective policy change would be to emulate Canada’s solution for permitting major energy projects: create a one-portal, one-permit federal policy for all permits.
There’s more; worth looking over the whole thing. By the way, despite the efforts of the government to stand in the way, and environmentalists to rend their garments, the new hydrocarbon revolution is likely unstoppable. Double good news: the environmental movement is about to get run over flat by a hydrocarbon-fueled, coal-bearing freight train.