The fossil-fuel energy era is not waning. Quite the opposite; it is still young.
For decades, activists have been trying to convince the American people that declining resources would forever make us dependent on expensive foreign oil. But according to a new report from the Institute for Energy Research (IER) on North America’s energy resources, that line of thinking is flat-out false. Based on the latest official statistics, domestic oil, natural gas, and coal deposits are much more extensive than commonly realized.
The real problem is that much of our resources are not being developed because of antiquated, heavy-handed government regulations. As a consequence, the American economy is being deprived of significant job creation and new investments.
Consider this. Total recoverable oil in North America exceeds 1.7 trillion barrels, which is more oil than the entire world has used over the last 150 years. And that amount alone could meet the energy needs of the United States for the next 250 years.
An estimated 1.4 trillion of those barrels are buried under American soil. For some perspective: the total proven reserves in Saudi Arabia is just about 260 billion barrels.
And even that 1.4 trillion figure might be an underestimation. Future technological innovation may well lead to improved detection techniques, helping us locate oil deposits currently uncovered. Or innovation could improve extraction techniques, enabling us to tap into reserves previously thought unreachable.
Recent history gives us good reason to be optimistic. Over the last 30 years, the United States has produced 77 billion barrels of oil — that’s two and half times the total domestic reserve experts estimated back in 1980.
The stats on domestic natural gas are also eye-opening. Recoverable natural gas in North America is estimated at 4.2 quadrillion — or 4,244 trillion — cubic feet. At the current rate of consumption, that’s enough natural gas to power North America for the next 175 years. And it means that our continent has more robust gas reserves than Russia, Iran, Qatar, Saudi Arabia, and Turkmenistan — combined.
Roughly 272.5 trillion cubic feet of that total are in the United States. And production is going up so rapidly that liquified natural gas (LNG) import terminals are being reversed engineered to export surplus U.S. gas.
In the late 1990s, pundits were predicting a sharp uptick in natural gas prices due to a decline in reserves. Just a few years later, American production actually increased dramatically. The reason? Human imagination bred breakthrough technological innovation. Developers built new extraction tools, making it economical to tap into reserves buried in shale and other tight rock formations.
Then there is coal, the most plentiful of all. North America has over 497 billion tons of recoverable coal. That’s three time the total reserves of Russia — which, up to this point, has been the world’s second largest source of coal. Such reserves could power the United States for the next 500 years.
So, we have huge deposits of a valuable energy resource that is unlocking resources faster than they can be consumed. Why aren’t we tapping into our bounty more fully?
The blame rests largely on unnecessary and onerous government regulations. Many offshore reserves are still blocked by outdated moratoriums no one is taking the time to reform. New permit applications are almost always subject to massive bureaucratic delays. Existing energy operations have to navigate labyrinthine — and costly — regulations. And regulators themselves are largely free to impose new controls on energy development with little to no congressional check.
The end result is that just a scant six percent of America’s onshore energy deposits are currently being developed. And only 2.2 percent of its offshore reserves are.
The price of oil and gas is much higher than it needs to be. And Americans are deprived of the jobs and wages that would have resulted from new energy projects.
Imagine if the country followed the path of some pro-production energy states, like North Dakota, which has seen a three-fold increase in its domestic energy production over the last five years. Thanks in large part to a recent explosion in energy-related jobs, the state’s unemployment rate is just 3.5 percent — the lowest in the country. And while the overall American economy grew just 2.6 percent last year, North Dakota’s grew 7 percent.
Likewise, Wyoming’s robust coal production sector has helped lower that state’s unemployment to just 5.8 percent. And Marcellus Shale projects in Pennsylvania have created an estimated 72,000 new positions since the end of 2009.
Affordable energy is the lifeblood of a vibrant economy. As IER’s report shows, this country is blessed with huge and diverse resources whose potential awaits a new philosophy from the current White House. The private sector has already developed the technology to tap into these resources, and many Americans are desperate for the economic opportunities that would spring from new projects.
All that we need now is for government regulators to take a long hard look in the mirror and reverse course. It is high time for America to make good on its energy potential.
Robert L. Bradley Jr. is the CEO & Founder of the Institute for Energy Research and author of Edison to Enron: Energy Markets and Political Strategies (Scrivener Publishing and John Wiley & Sons).