Debate continues across the country on our nationís energy future. The competing visions, however, are not just philosophical arguments. There are real differences between these two visions and their outcomes on our economy, on consumers, and on our way of life.
On one hand, we have todayís energy reality in which the U.S. leads the world in production of oil and natural gas and consumers enjoy almost unprecedented energy security. Drivers saved more than $550 at the pump in 2015, while lower costs for energy related products and services boosted household budgets by $1,337. The overwhelming majority of Americans support policies to maintain U.S. energy leadership. This pro-energy vision means energy from all sources, including oil and natural gas, generate economic growth and reduce carbon emissions.
While 80 percent of American voters support increased U.S. oil and natural gas production, a vocal minority of extreme environmental activists work to obstruct energy development and infrastructure projects, reducing our energy options under a false belief that oil and natural gas production and use are incompatible with environmental progress. Their vision is one of constrained energy choices, with less certainty and reliability, and with less assurance on affordable power.
What would happen if we halted new oil and gas leasing, banned hydraulic fracturing and stopped permitting energy infrastructure? A recent study using the Energy Information Administrationís economic model and base case inputs revealed freezing the American energy revolution means the average American household could see its costs jump $4,550 by 2040 due to increased costs for transportation fuel, electricity, home heating, and goods and services.
Stopping the American energy revolution would take us back to last centuryís era of energy dependency. The U.S. economy would lose a projected 5.9 million jobs. Only twice in the past 70 years has the U.S. unemployment rate exceeded 8.2 percent. But the vision of extreme environmental activists would take us there again, plunging the economy into persistent recession-level unemployment throughout 2020 to 2040. Lower U.S. energy production and higher energy prices could reduce cumulative GDP by $11.8 trillion. That is a stark contrast to todayís world, in which U.S. energy leadership is generating important economic benefits for American families and businesses.
Extreme environmental activists would not only erase, but reverse, all those gains, taking the U.S. back to an era of energy dependency ó all based on the false idea we must choose between energy security and environmental progress. In reality, the U.S. leads the world in reduction of carbon emissions and in production of oil and natural gas. The U.S. emitted 23 percent fewer energy-related carbon emissions in 2015 than 2005. Carbon emissions from power generation have plunged to nearly 30-year lows primarily because of greater availability of natural gas. In fact, more than 60 percent of the carbon reductions in the electric power sector from 2005 to 2016 have been the result of fuel switching from higher emission generation to natural gas generation.
Even under the most optimistic scenarios for renewable energy growth, oil and natural gas will supply 60 percent of U.S. energy needs in 2040. Whatís more, projections show worldwide energy consumption will increase by more than 38 percent by 2040 and 67 percent of that will be met by fossil fuels.
The oil and natural gas industry has proven that during the long-term, it is possible to lead in energy production and in environmental stewardship. Those are the facts.
Contrary to claims from extreme environmental activists, cutting U.S. oil and natural gas production would not magically reduce world energy demand. But it could raise costs significantly for American families and manufacturers, profoundly damage the U.S. economy, diminish our geopolitical influence and severely weaken our energy security. Thatís where extreme environmental activists strategies lead, and it is not a path most Americans want to take.
We should set aside the acrimony and division that has marked too much of past national energy policy discussions and work together as one nation on a positive forward-looking energy future based on the understanding that our nationís best energy future can only be achieved through a true all-of-the-above energy strategy. With forward-thinking energy policies, we can ensure the U.S. energy revolution continues to provide benefits for American consumers, workers, and the environment.
Edward Cross is president of the Kansas Independent Oil & Gas Association.