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Home / Carpe Diem / Keeping fossil fuels in the ground is a nonsensical idea that would amount to a self-imposed energy shock – Publications – AEI

Keeping fossil fuels in the ground is a nonsensical idea that would amount to a self-imposed energy shock – Publications – AEI

Summary:
AEI Keeping fossil fuels in the ground is a nonsensical idea that would amount to a self-imposed energy shock Here’s a shortened version of my op-ed in the U.S. News & World Report “Keeping Fossil Fuels Underground Makes No Sense“: For the average American, energy has never been more affordable. As a share of total consumer spending, Americans spent less than 4% on energy during each of the last two years, the lowest in history. Today the U.S. leads the world in oil and gas production, and we are more energy secure and competitive in international markets. None of this would have been possible without the Shale Revolution and the increase in energy production. But these gains may be in peril. If those opposed to oil and gas drilling get their way, we could experience an upheaval in energy

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AEI
Keeping fossil fuels in the ground is a nonsensical idea that would amount to a self-imposed energy shock

Keeping fossil fuels in the ground is a nonsensical idea that would amount to a self-imposed energy shock - Publications – AEI

Here’s a shortened version of my op-ed in the U.S. News & World ReportKeeping Fossil Fuels Underground Makes No Sense“:

For the average American, energy has never been more affordable. As a share of total consumer spending, Americans spent less than 4% on energy during each of the last two years, the lowest in history. Today the U.S. leads the world in oil and gas production, and we are more energy secure and competitive in international markets. None of this would have been possible without the Shale Revolution and the increase in energy production.

But these gains may be in peril. If those opposed to oil and gas drilling get their way, we could experience an upheaval in energy markets similar to what happened during the embargo of the 1970s.

While the arguments in favor of oil and natural gas are well-known, restricting their production in the United States would be tragic. The share of the nation’s energy from solar and wind will grow in the years ahead, but these renewables contribute only marginally to U.S. energy supplies. Combined, solar and wind, supply only a little more than 3% of the energy Americans use today (see chart above). And the Department of Energy estimates that solar and wind power together will provide less than 10% of America’s energy in 2050. In contrast, oil and natural gas supply nearly two-thirds of the nation’s energy and that share will continue through 2050 and beyond.

What’s conveniently ignored by many environmentalists is that natural gas is essential for the growth of solar and wind power, since it’s needed as a back-up fuel on days when the weather is not cooperating. As a result of the continuing shift from coal to gas at power plants, U.S. carbon emissions from electricity production are now the lowest in nearly 30 years. Replacing additional coal plants will reduce emissions even more. The reality is that the U.S. is a world leader in the reduction of greenhouse-gas emissions due to the increased use of natural gas.

The world needs more oil and gas, not less. Yet environmentalists want to shut down production. Despite the demand for energy, decades-old bans on oil and gas production are still in place in large parts of the American West and offshore. President Trump recently proposed opening up 90 percent of the oil and gas that lies beneath the Outer Continental Shelf, but the leasing of offshore tracts is many years away. Meanwhile, New York State and Maryland have clamped bans on hydraulic fracking for oil and gas, and the regional Delaware River Basin Commission is considering a plan to prohibit the use of fracking in the Marcellus shale.

Today’s energy challenge for the U.S. is to remain competitive in global markets for oil and gas. “Keep-it-in-the-ground” environmentalists who want to halt U.S. production ignore the effects such a radical approach would have on the U.S. economy. Even environmentalists should welcome the transition from coal to natural gas and reconsider their infatuation with renewables and efforts to keep fossil fuels in the ground. U.S. energy policy should encourage investment in oil and gas, not because they already meet most of our energy needs but because they’re affordable and reliable and essential for stability in the century ahead. Keeping fossils fuels in the ground is a nonsensical idea that would amount to a self-imposed energy shock that would risk taking us back to the 1970s.

Keeping fossil fuels in the ground is a nonsensical idea that would amount to a self-imposed energy shock
Mark Perry

Mark Perry
Mark J. Perry is concurrently a scholar at AEI and a professor of economics and finance at the University of Michigan’s Flint campus. He is best known as the creator and editor of the popular economics blog Carpe Diem. At AEI, Perry writes about economic and financial issues for American.com and the AEIdeas blog.

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