It was clear in pre-election discussion that Americans want energy independence. The most successful means to this end has been the free market—and the release of the International Energy Agency’s (IEA) annual World Energy Outlook proves it.
IEA projects that while global energy demand will climb, America will emerge as a net exporter of natural gas by 2020 and be “almost self sufficient in net terms by 2035.” Also by 2035: North America as a net oil exporter. The implications are enormous, both at home and abroad.
President Obama’s first-term vision of energy independence has been a combination of importing less oil, mandating less use of oil and other conventional fuels, and supplanting them with green energy programs and research.
The results are quite clearly illustrated by what is happening on federal lands, where production is down or nonexistent. Meanwhile, federal investment in green energy has skyrocketed. The IEA recognizes this trend by projecting the contribution of renewables to continue increasing as billions in subsidies and programs are spent to integrate them.
Nevertheless, the market and private-sector innovation have more than covered for the lost opportunities on federal lands. The natural gas boom witnessed by the nation was brought to bear in states like North Dakota, where state and local governments have safely regulated hydraulic fracturing. They have also allowed room for entrepreneurs to develop an energy supply that has turned former projections of natural gas supplies upside-down.
Subsidizing the use of more renewable energy is not the guaranteed path to energy independence that many in Washington claim it is. Further, making the most of America’s energy supply does not require more government programs and incentives. It calls for common sense: letting those who stand to gain and lose the most take the business risks needed to advance energy production and innovation.
On the regulatory side, this means turning over more authority to states, which can more efficiently and appropriately manage (often non-competing) energy and environment concerns.
The IEA report shows that America does not have a dearth of energy. Nor is it the role of the federal government to direct the American energy economy toward a certain vision of energy independence. The goal instead should be to create and protect an environment that allows people to pursue all of America’s energy resources.
It’s time Washington adjusted its thinking to this huge influx of energy natural resources and let the market do its work.