In the past decade, the United States has suffered a housing implosion, a catastrophic financial crisis and the agonizingly slow growth of a jobless, low-wage recovery.
But not all news has been bad, as the Congressional Budget Office made plain this week with a new report on the fracking revolution. The report should remind members of the new Congress that they should ignore the dishonest environmental radicals and their false propaganda and help make the nation a net petroleum exporter again.
The unconventional oil and gas industry, as fracking and shale production is known, is breathing life back into rural America. It is creating the economically sustainable high-wage jobs that President Obama’s stimulus package never could. It is bringing down trade deficits, replenishing the coffers of indebted governments, pulling down energy prices and taking away diplomatic leverage from some of the world’s most hostile and unpleasant regimes.
U.S. oil and gas production continues to reach new heights each month thanks to fracking, putting this country on par with oil powers such as Russia and Saudi Arabia. That is good for everyone who lives here, not just for energy businesses. It not only increases economic output by a noticeable amount (three-quarters of a percentage point by 2020, CBO predicts), but also because it reduces energy costs for consumers and industries. Fracking will boost federal tax revenues by about 1 percent annually by 2040 without requiring any tax increases, according to CBO’s projections.
The fracking-fueled increase in U.S. oil and gas production will have other, intangible benefits as well. Fracking has already helped cut oil imports by half. It could weaken Russia and other hostile powers that use their energy supplies to bully their neighbors.
These are great benefits, and Congress can do much to enhance them. First, it can lift the ban on crude oil exports, a relic from another era that does not benefit consumers. CBO projects that lifting the ban would slightly lower the price of petroleum products worldwide, but the diplomatic benefits could be even greater.
Congress can also help the United States achieve an even more dominant position in the world market by opening up more public lands to oil and gas exploration. Production of oil and gas on federal land has slowed dramatically under Obama.
Finally, the new Congress can expedite federal approval for construction of as many liquid natural gas terminals as the world market can sustain. CBO notes that the United States will be producing more gas than it can consume by the end of this decade. The federal government should do anything it can to get out of the way as international markets make Americans wealthier and strip foreign powers of the malign leverage they exert with manufactured crises over natural resources.
A free-trade policy on shale gas and oil is a win-win for everyone except radical environmentalists, Russian President Vladimir Putin, Iran’s mullahs and a small handful of American corporate special interests. These forces are hoping Americans will recoil from fracking based on false, debunked propaganda about its effects on drinking water. With a Congress in place that knows better, it’s time to open up to the world and make America an energy exporter.
