A NEW ENERGY AGENDA: MORE IS MORE

Engines of economic growth. (Warenemy/Dreamstime)

There is no substitute for abundance. A country that produces more food and steel and aircraft and microprocessors is going to be, ceteris paribus, better off than one that produces less. A country with a larger share of its population working is going to produce more than a country with a smaller share of its population working, as has been the unhappy trend in the United States during the presidency of Barack Obama. All the blue-ribbon panels and price-control trickery that the progressive hive-mind can dream up will do little or nothing for the quality and affordability of health care compared with increasing the supply of doctors, hospitals and clinics, pharmaceutical manufacturers, makers of medical devices, and the like. “Less is more” might work in the context of the aesthetic of Ludwig Mies van der Rohe or the poetry of Robert Browning, but in the economy of real things, more is more. And the new Republican majority in Congress is well positioned to implement a more-is-more philosophy in a critical economic sector: energy.

It is difficult to overstate the importance of energy in the U.S. economy: The energy market affects almost every company and every industry, from AAL to AAPL, and we have an abundant supply of it, from oil and gas to coal and other sources. Getting government out of the way and allowing those industries to flourish even more fully than they have is a project that is, unlike some of the more ambitious items on the conservative wish list, well within reach, even with President Obama’s veto pen potentially standing between bill and law.

A little history for context. The immediate postwar U.S. economy was in many ways an atypical and unsustainable situation, given that the country’s commanding position in manufacturing — some 60 percent of the world’s industrial output — was predicated in part on the fact that the rest of the world was trying to rebuild its factories after the ruinous war. That wasn’t going to last forever, but manufacturing wasn’t the whole story, either.

As Paul Johnson points out in his elegant new biography of Dwight Eisenhower, the postwar United States constituted an unparalleled and unprecedented economic force. It was a more-is-more economy, producing a third of the world’s grain and half its cotton, and the lion’s share of its iron, phosphates, copper, and precious metals, outstripping the combined production of the major nations. It was the world’s largest producer of minerals, with four times the output of the second-largest. Everybody remembers (with varying degrees of accuracy) the ready availability of blue-collar factory work at decent wages in those days, but less appreciated is the role that energy played: The United States in those years was the world’s largest petroleum producer, pumping more oil than the rest of the world combined and generating 90 percent of the world’s natural gas. Between 1950 and 1970, total U.S. petroleum production nearly doubled, and then it began to fall off in the early 1970s, a decline that coincided with a general stagnation in the economy — coincidence, but not mere coincidence.

The International Energy Agency calculates that the United States is poised to take the top spot again in 2015, and that by 2020 total U.S. oil production (crude, condensates, and gas liquids) will climb to 11.6 million barrels a day. And that’s great news — but it’s still 100,000 barrels a day less than we were producing in 1970, and that with our radically improved extraction techniques. So that’s relatively low-hanging fruit, not a best-case scenario.

The energy industry isn’t just about hydrocarbons in the ground. Getting those out in an economical and environmentally responsible fashion is an engineering problem that we have a pretty good handle on; Americans tend to be pretty good at engineering problems. But there are other challenges, an important one of which is infrastructure. The most famous energy-infrastructure fight recently has been the one involving the Keystone XL pipeline; Senator Mark Udall’s equivocation on the issue was, if I am reading the Colorado results correctly, an important factor in his defeat by Republican challenger Cory Gardner, who is unequivocal in his insistence that it is time to build the thing already. Before Tuesday’s election, there were 57 senators who supported Keystone XL; in January, there will be at least 61. Barack Obama has made it clear that the political interests of congressional Democrats are a secondary concern to him at best; Republicans have a chance to bring a significant number of Democrats around in a bipartisan consensus that is, for once, on the right side of an issue. If the president wants to stand in the way of that, it’s a good fight for Republicans to have. It’s a chance to remind the country that California has a lot of oil shale and relatively few good blue-collar jobs.

READ ENTIRE ARTICLE HERE: http://www.nationalreview.com/article/392151/energy-more-more-kevin-d-williamson

Print this post

Do you like this post?

Add your reaction to this article