May 24, 2016, 09:00 am
'Keep It In The Ground' should be buried
By Randall Luthi
Emboldened by the Obama Administration’s anti-oil and gas leasing decisions, extreme environmental groups have gained traction with the “Keep it in the Ground” campaign, demanding policies that would stop the extraction of fossil fuels from federal lands. Their argument -- preventing fossil fuel extraction will prevent spills and the release of greenhouse gases -- seems simple. But considering the tremendous benefits oil and natural gas provide, the result would be anything but simple.
"Keep it in the Ground" will diminish the energy security, opportunity and freedom that fossil fuels make possible. Affordable energy powers our economy and provides jobs and opportunity. Fossil fuels provide energy to heat and cool our homes, cook our food, run our businesses, and operate planes, trains, automobiles and boats. Modern devices, life-saving medical equipment, clothing, eye-glasses, carpeting, roads, and even the roofs over our heads are all made with petroleum based components. American consumers should carefully consider the sweeping ramifications of Keep it in the Ground:
The end of U.S. energy leadership. Without federal production, the U.S. will no longer be as energy self-sufficient. In 2014 and 2015, the U.S. produced about 88% of its energy needs. Federal lands, onshore and offshore, yielded 23% of U.S. fossil fuel production. Next year, federal offshore areas alone are expected to yield about 20% of our domestic oil. State and private development will not be enough to prevent the U.S. from losing its energy leadership position.
The recently gained benefits of U.S. oil exports will also be greatly diminished, if not extinguished. Our oil imports will increase if Keep it in the Ground succeeds, undermining U.S. leadership and returning us to reliance on imports from countries that do not support our policies. Friendly Canada will gladly increase fossil fuel exports to the U.S., but we will also import fossil fuels from unfriendly Venezuela, Russia and countries in the Middle East.
Increase prices at the pump, and beyond. Not so long ago, surging gasoline prices were daily news and millions of hardworking families in America had less money for vacations, retirement savings and college. If Keep it in the Ground succeeds, we could see $4 per gallon gasoline again pay more for clothing, phones, computers, home appliances and any product made with petroleum based components.
Increased taxes; less money in our pockets. According to the Department of the Interior (DOI), fossil fuels generated over $8.5 billion to the U.S. government in 2015; over 52% from offshore oil and gas. This revenue funds federal programs and is redistributed to states for vital projects, including coastal restoration. Any shortfall in revenue to these programs will be made up through taxpayer dollars. That’s an $8.5 billion tax increase; money taken out of American pockets.
Harm to federal and state programs. The alternative to a tax increase is reducing federal and state programs. Last year, DOI distributed to states $1.8 billion derived mostly from fossil fuel development on federal lands. Federal offshore oil and gas development is the sole funding source for the Land and Water Conservation Fund (LWCF). Over $888 million was available to the LWCF in 2015. Without an alternative funding source, Keep it in the Ground will bury the LWCF
Little impact on greenhouse gas emissions. The U.S. has demonstrated that increased oil and gas production can coincide with reduced greenhouse gas emissions. Improved mechanical efficiency and enhancement of environmental factors that increase absorption of carbon dioxide can do more to reduce greenhouse gas emissions than Keep it in the Ground. The Energy Information Administration predicts that fossil fuels will supply over 80% of the U.S. energy market in the year 2040, despite the growth of non-traditional forms of energy. Even if the U.S. keeps fossil fuels in the ground, the rest of the energy producing world probably won’t. Nothing would make OPEC, Venezuela, Brazil, Russia and other fossil fuel exporters happier because less competition from the U.S. means more market share for them.
In short, "Keep it in the Ground" is an anti-energy, economically destructive and short-sighted concept that will bring no meaningful reduction in greenhouse gas emissions, a huge hole in federal and state budgets, higher pump prices, and a void in U.S. global energy leadership. It should be buried and replaced with a truly all-of-the- above energy policy to meet the goals of a cleaner environment and economic stability.
Randall Luthi is President of the National Ocean Industries Association (NOIA) in Washington, DC.