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Week in Review: The Politics of Energy

February 11, 2013

Alexandra Moran ’15

In an article appearing in The Daily Beast, author Daniel Gross discusses the bleak status of the nation’s economic environment. According to the article, the country’s unemployment rate has jumped to a dangerous 7.9 percent. This staggering figure paired with last week’s news of the 0.1 percent annual decline of the gross domestic product (GDP) has severely handicapped productivity and economic welfare of the United States.  If there were a single, plausible hope and potential remedy for this desperate situation, it may very well lie in the implementation of a national energy plan.

The severity of the ramifications of an undeveloped national energy plan can be seen in the declining position of American industry. Currently, Oklahoma based Chesapeake Energy Corporation, one of the nation’s foremost producers of natural gas, must reassess its future goals as the low prices of natural gas are unable to satisfy the company’s elevated gas locating and extracting costs. The Wall Street Journal notes in its coverage of the issue that this occurrence not only directly affects the jobs of the 5,000 individuals who are employed by Chesapeake in Oklahoma City, but also represents an industry wide downturn. Additionally, the ripple effect from such a sharp decrease in productivity is far-reaching and monumental.   Chesapeake’s situation in Oklahoma City is just one example of the scenario that is playing out for energy exploration companies across the nation. The recent boom in natural gas has created a glut, causing prices to fall dramatically as the market is unable to find enough use for this energy source.  The problem is not finding a use for the recent energy surplus; the issue is that an efficient method does not exist to bring the energy to the majority of American consumers. A national energy plan built on domestic natural resources and focused on immediate research and investment would allow America to significantly decrease foreign oil dependence and at the same time, increase employment opportunities and productivity.

Currently, the Obama administration is making efforts to promote natural gas production in Colorado, an effort that is lauded by its supporters as having great potential to create jobs and increase tax revenues for the state.  According to a New York Times article, 114,932 acres of public land will be sold this month for oil and gas drilling purposes. However, the pro gas regulation stance and grip of harsh environmental rules continues to inhibit the growth potential of the industry. A New York Times article by Norimitsu Onishi details the suppressed developments being made in Fellows, California with regards to the massive plots of land estimated to contain 15.4 billion barrels of untapped natural resources.  The untapped natural energy resource, known as Monterey Shale however, calls for a highly involved and extreme form of horizontal drilling. This requirement has spawned great conflict within the state, as environmental advocacy groups are calling for increased regulation of hydraulic fracturing, or fracking, an extraction process that has been condemned as environmentally damaging by environmentalists.  This highly regulated, anti-business environment created by the Obama administration effectively cripples the nation’s greatest hope for energy independence. The implementation of an energy policy would add to the GDP while decreasing the national debt burden that currently plagues the country. By utilizing the natural resources on American soil, the United States would lessen its dependence on foreign oil and stop the transfer of American wealth to global competitors.  Additionally, the low energy costs enabled by the nation’s natural gas boom would offset the low cost labor differential American industry faces when competing globally.

With the discovery of hundreds of years worth of energy here in the United States, it seems as if the proverbial golden goose has been found. USA Today reports that president Obama has chosen staunch environmentalist Sally Jewell to be protector of the hen house with her nomination for Secretary of the Interior. Jewell’s nomination is lauded by environmentalist groups across the nation and this endorsement rings as a harbinger of even tougher times to come for those wishing to develop domestic energy.

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