Hydraulic fracturing is performing miracles — expanding the economy, providing affordable energy almost anywhere politicians allow drilling, and improving air quality. Meanwhile, America’s abundant oil and gas is changing geopolitics by reducing our dependence on foreign sources and freeing our hand to act in the nation’s and our fellow human beings’ best interests. This is what Ronald Reagan envisioned when he became president nearly four decades ago.
In 1981, Reagan faced a nation reeling from double-digit unemployment, double-digit inflation, and double-digit interest rates. He knew the economy could not grow without reliable sources of energy, for which the United States depended on foreign sources. Meanwhile, that dependence governed the nation’s foreign policy. Reagan saw the economy, energy, and foreign policy linked inextricably with one solution: develop energy on federal lands — onshore and offshore. Of course, Reagan bristled at the term “federal lands,” declaring, “Isn’t it time we remembered that the very term means it belongs to us — to the people of America?”
Reagan advocated development of federally owned energy for years in his radio broadcasts after stepping down as California’s governor in 1975. His optimism that the United States had abundant undeveloped energy stood in sharp contrast to conventional wisdom. After all, in 1977, President Jimmy Carter declared that oil and natural gas “are running out” and that the country must make “profound changes … to lower oil consumption.”
Reagan thought this ridiculous. “If all the oil is going to be gone in 30 years, does it really make much difference if we make it last 33?” When he learned Carter barred drilling in the Rocky Mountains, Reagan declared, “Why is the government so anxious to lock up this [federal] land[?] Is it a fear that more [natural gas] strikes will be made?” Reagan’s optimism had three foundations.
First, he did not believe the federal government’s energy estimates. “I don’t buy the CIA’s report quoted by [President Carter that] has us running out of oil in about 30 years,” Reagan said. He felt the prediction was dubious because he’d studied similar predictions made dating back to 1910. “In 1949, our Department of the Interior said the end of the U.S. oil supply was in sight. We increased production in the next five years by a million barrels a day.”
Second, Reagan believed, as to energy, “government is the problem,” not only because “the federal government owns one-third of the United States,” but also because much of that land holds vast energy resources that are off limits to development. For example, reported Reagan, in an area where “one of the richest natural gas strikes in years was made within recent months,” agencies sought to close 90 million acres.
Third, Reagan offered a simple solution to the “energy crisis” abandoned by the Carter administration: “Why don’t we try the free market again?” Recognize, he said, the oil and gas industry is not a monopoly; independent operators make most discoveries: “About 80% of the finding of new oil has been done — not by the giant oil companies but by independents [that] have been the hardest hit by government’s punitive policies.”
In his acceptance speech at the Republican National Convention in 1980, Reagan declared, “America must get to work producing more energy. … Large amounts of oil and natural gas lay beneath our land and off our shores, untouched because the present administration seems to believe the American people would rather see more regulation, taxes, and controls than more energy.” In his inaugural address, he said, “It is time for us to realize that we are too great a nation to limit ourselves to small dreams. We are not, as some would have us believe, doomed to an inevitable decline.”
Reagan opened the entire Outer Continental Shelf, all 1 billion acres, to permit those betting their own money on the most likely prospects for oil and gas development to choose where to drill. Reagan’s Outer Continental Shelf policies and the oil and gas industry’s ingenuity drove the search for energy into oil-prone deeper Gulf of Mexico waters. There, thanks to new seismic, drilling, and subsea engineering technologies, operators discovered the largest oil find in 25 years.
Meanwhile, federal onshore oil and gas development suffered with the collapse of oil prices in the 1980s. But, thanks to increased availability of federal lands in the Reagan administration, far-sighted independents like the late Mick McMurry brought hydraulic fracturing to Western federal lands. He was so successful that major oil and gas outfits returned to the Rockies. Meanwhile, hydraulic fracturing enjoyed remarkable success on state and private lands across the country.
Today, we celebrate a quasi-energy independence that was unforeseeable, even laughable according to the Malthusian experts of 1980. It was not without missteps along the way. In the three decades since Reagan left Washington, an “environmental president,” a president who was a willing tool of the environmental movement, a president distracted by the war on terror, and a president whose job as a “community organizer” gave him common cause with environmental extremists each forsook Reagan’s farsighted approach to meeting energy needs.
Fortunately, grown-ups are back in charge. President Trump reinstated Reagan’s offering of the entire Outer Continental Shelf, although it is caught up in courtroom battles that will require, as it did with Reagan, the Supreme Court to fix. Trump’s Bureau of Land Management is moving aggressively to allow Westerners to benefit from hydraulic fracturing as have, for example, Pennsylvanians. Finally, President Trump lifted the stacks of regulations that were especially vexatious in a risk-filled industry like oil and gas development.
Thanks to President Reagan and President Trump, our energy, economy, and world standing are better than ever.
William Perry Pendley (@Sagebrush_Rebel) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is an attorney and the author of Sagebrush Rebel: Reagan’s Battle with Environmental Extremists and Why It Matters Today.
