Today in National Review Online, Mark Mills has a terrific column titled “Unleash the Energy Export Revolution.” He begins by calling out the irrationality of our government’s current anti-energy export policy:
On May 17, the Department of Energy (DOE) approved just the second license in America to export natural gas. Nineteen more applicants still wait. Yes, private businesses, willing to spend tens of billions of private capital, are lined up for a schoolyard game of “Mother May I” to get permission to export a product that the U.S. is uniquely good at manufacturing. So good, in fact, that America is now the world’s No. 1 producer, with no end in sight. What a world.
Or, as comedian Yakov Smirnov might say, “What a country!”
Mills makes several salient points.
The DOE’s control over gas exports and the Department of Commerce’s control over crude oil exports come not from any constitutional requirement but rather from statutes enacted in 1938 and 1975, when conventional wisdom held that America was in danger of running out of gas and oil. Advances in directional drilling and hydraulic fracturing make such depletionism an “outdated” idea.
The easiest way to grasp the folly of self-inflicted barriers to U.S. energy exports is substitute “words like wheat, soy, microprocessors, or even software, for the words natural gas and ask whether it makes sense for bureaucrats and politicians to be empowered with decisions about where American firms can sell what they produce cheaper, better, and more productively than any other country.”
Since literally thousands of entrepreneurial firms of all sizes compete in today’s hydrocarbon shale fields, the new era of domestic energy production “is not a ‘Big Oil’ game (though they’re buying into it now), but a classic reprise of America’s ‘can do’ era.” Moreover, unlike the first U.S. hydrocarbon revolution, today’s oil and gas boom is “widely distributed,” occurring “in dozens of states.” Mills comments: “We’ve been looking for a manufacturing- and small-business-driven economic revolution. Well, it’s here.”
The shale boom has already attracted $150 billion in foreign direct investment, and done so without subsidies, regulatory preferences, or Stimulus loans. It could pull in $5 trillion in additional investment in the next decade if official Washington allows Americans to compete in the global marketplace.
The boom has already created millions of jobs and generated billions in federal and state tax revenues despite political opposition, ideological attacks, and restrictions on gas and oil development on federal lands. “Imagine what could be done,” writes Mills, “if Washington decided to flip the intellectual framework from delay, oppose, and control to accelerate, encourage, and unleash.”
Mills recommends that Congress strip the DOE and the Department of Commerce of their antiquated powers to control gas and oil exports. He also indicates how such reforms should be sold to the Obama administration — as “consistent” with the President’s National Export Initiative, which aims to double U.S. exports over 2010 levels by 2015.
Mills’s NRO column draws upon his recent study, The Case for Exports: America’s Hydrocarbon Industry Can Revive the Economy and Eliminate the Trade Deficit.