Even as the energy sector helps propel the nation’s economic resurgence with billions of dollars of investment in new project and technologies, it is facing hurdles in an unlikely quarter: states with economies that depend on a strong energy sector.
In two states with large stakes in the energy industry — Alaska and Washington — governors who could reap great benefits from partnering with energy companies are instead working to undermine them at a time when the nation’s economy is still fragile.
In Washington, Governor Jay Inslee has repeatedly sought to block plans to build shipping terminals that would help revive the fortunes of the coal industry in his state and other economically beleaguered regions of the country.
He has demonized producers as environmental menaces, going so far as to compare his crusade against global warming to his father’s decision to fight against the Nazis in World War II.
His words and deeds are puzzling given that he presides over one of the most trade-dependent states in the nation. Indeed, his opposition to the expansion of the state’s export terminal places the state at a disadvantage to neighboring Canada and California, where similar ports either exist or are in the planning stages.
In a sense, Inslee is working against his own environmental agenda. Experts note that the coal that would pass through the proposed ports to developing countries in Asia is actually cleaner burning than coal these countries would get elsewhere.
In Alaska, once a pillar of the nation’s energy sector, the new independent Gov. Bill Walker is taking on the very industry that provides nearly 90 percent of his state’s revenue. A natural gas pipeline is already being built there under a joint agreement between the state and private companies. But Walker is pushing to build a fully state-owned pipeline to compete with it, and he has said he has no intention of abandoning this ill-conceived plan.
The decision has injected a degree of uncertainty in Alaska at a time when private investment could help the state grapple with its $4 billion budget deficit. Moody’s has already downgraded Alaska’s credit rating since Gov. Walker was elected to office last November. And with his latest actions, Walker is doing precious little to reassure rating agencies and investors that Alaska is a sound place to invest and do business.
Governors like Inslee and Walker would be well advised to follow the lead of John Hickenlooper, the Democratic governor of Colorado. Hickenlooper has tailored policies to encourage the industry to pursue even more development and exploration. He even worked with the industry to develop recommended best practices to extract energy resources like natural gas, silencing some critics who sought a ban on gas exploration.
“We can’t find examples in Colorado, or more than one or two examples, where fracking, in any sense, has caused harm or been sufficiently dangerous to the public to justify us to ban it,” he recently told the local media, adding that any ban endangers a “$20 billion a year industry and 100,000 jobs.”
In recent years, the energy industry has ushered in a period of exploration and energy development not seen since the oil boom of the 19th century — thereby positioning the United States as a global leader in energy production.
Beyond that, the energy sector has dwarfed growth elsewhere in the economy since the start of the recession and subsequent recovery. It now supports 10 million jobs up and down the supply chain. And it is making investments in the US economy at a faster and more substantial rate than any other sector, contributing nearly $60 billion in one recent year alone.
With our fragile economic recovery still in its early stages, and state growth still at pre-recession levels in many places throughout the country, there’s no room for executives who are interested in placing more roadblocks in the way of progress and growth.
John Burnett is a financial services executive with over 20 years of experience in risk management, operations, governance and compliance. He was a 2013 Republican candidate for New York City comptroller. Follow him on Twitter: @IamJohnBurnett Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
