Imagine a future in which the United States abandons its tepid policy of inching toward energy "independence" and instead joins forces with Canada and Mexico to become the worlds largest energy exporter.
It could push the Middle East off the geopolitical center stage. Americans would profit from supplying the world energy instead of spending to defend those supplies. The North American energy industry would also bring trillions of dollars in domestic economic benefits and generate millions of jobs.
This felicitous scenario is now possible because the energy world has been turned upside-down. While policymakers globally have focused on alternatives to hydrocarbons, from solar and wind to plant matter, the game-changing technologies that have emerged are in the traditional sectorsunleashing staggering quantities of natural gas, oil and coal.
We have the potential to become the worlds swing supplier of energy. For the U.S. economy and its North American neighbors, Mexico and Canada, the reality is nothing short of revolutionary.
The timing of this technological juggernaut is fortuitous. Titanic demographic forces are in play. The Asia-Pacific tigers are projected to increase global energy demand 40 percent to 50 percent by 2030, according to every credible forecastfrom our own Department of Energy to the International Energy Agency. Its like adding two United States worth of consumption in less than two decades.
The same forecasters acknowledge that at least 60 percent to 80 percent of that energy must come from hydrocarbons. The economic imperatives and the physics of energy dictate this.
Policymakers from Spain to China, and Germany to the U.S., have spent decades pursuing the dual goal of replacing hydrocarbons with alternative energy and revitalizing their economies with green jobs. It hasnt panned out. The favored alternativesincluding wind and solarbarely exceed 1 percent of global energy today, most likely rising to just 5 percent in 20 years.
There have indeed been real technology gains in alternatives. But many analysts act as if the hydrocarbon industries operate in a parallel universewhere two decades of profound advances in information and materials sciences never took place. For its with hydrocarbons that new technologies have been transformative.
With these advances, the U.S. has emerged as the worlds fastest-growing producer of oil and natural gas. Production growth these past few years has reversed a 40-year decline. All this has happened in an environment either hostile to or, at best, neutral toward hydrocarbons.
In hydrocarbon-friendly states, tax coffers are bulging and job markets are booming, largely from production on private and state-controlled lands. Ohio alone stands to reap 200,000 new jobs by 2015 and $22 billion in economic growth. In the Western states, a mere few dozen proposed oil and gas projects could generate 120,000 jobs and $400 billion cumulative benefits over 15 years.
If theres a smart-money bellwether, consider Carlyle Groups latest betbuying and refurbishing Sunocos Philadelphia oil refinery. Refined petroleum product exports are growing rapidly and are highly profitable.
A number of recent detailed forecasts predict that the U.S. could close in on zero imports if current trends continue. We could finally realize that elusive goal of energy "independence." In the process, we could add nearly $1 trillion in cumulative federal, state and local government tax revenues and generate 2 to 4 million new jobs.
But independence misses the point in a world craving fuel. We need to become an exporter. The U.S. could, in collaboration with Canada and Mexico similar to the North American Free Trade Agreement, forge policies to encourage hydrocarbon production and export.
That would reset geopolitics. And just starting down that path would really light a fire under job and economic growth.
We know sufficient geophysical resources exist to support an export-nation policy. U.S. Geological Survey data reveal that this continent has more than 10,000 billion barrels of oil-equivalent in natural gas, oil and coal. Thats more than four times the resources of the Middle East. We consume only 20 billion of that a year.
If we maximized North American hydrocarbon potential, our energy exports to the world could exceed those from the Middle East by 2030. This would add something like $7 trillion to our economies, spur manufacturing as well as research and development investment from the largesse and stimulate millions more high-paying jobs. And it would send tremors through the fields of the Middle East and Russia.
The key to converting resources to producible "reserves" for export lies in advancing technology. We might even embrace the shocking idea of subsidizing this. But we cannot be an export nation without moving beyond a ball-and-chain regulatory systemincluding access to the vast swaths of resources under off-limits federal lands.
There is no doubt the world will use vastly more hydrocarbons in the future. The only real variables are who will supply all that fueland thus who will enjoy the economic and geopolitical benefits.
We have the potential to be that leader. If we dont grab that chance, others will.
Expanding North American hydrocarbon production for export may be our most important opportunity for growthas well as for long-term peace.
Original Source: http://www.politico.com/news/stories/0712/78978.html