The International Energy Agency (IEA) released its 2012 edition of the World Energy Outlook (WEO) this week and proclaims “North America leads shift in global energy balance.” This should come as no surprise to many familiar with the vast amount of natural resource potential that Americans are blessed with and the new energy revolution that is taking place with shale oil and natural gas.
According to the IEA, the United States will become a net exporter of natural gas by 2020 and almost self-sufficient in energy, in net terms, by 2035. Furthermore, by 2035 North America is projected to emerge as a net oil exporter. Oil and natural gas production has been increasing the past few years, but surprisingly, to those who don’t follow the Obama administration’s policies, the increase has all been on private and state lands. Oil and natural gas production has been decreasing on federal lands yearly and accelerated under the Obama administration. Energy took the national spotlight in this year’s Presidential election, including the topic of energy independence. If President Obama wants to bring Americans closer to energy independence during his second term, he needs to drastically change his administration’s permitting process in order to speed up the energy production that IEA predicts.
Another big factor in achieving energy independence is smarter regulations on the coal production on use. America has the world’s largest coal reserves and coal produces nearly forty percent of the electricity in the U.S. The administration appears to be doing everything they can to keep good on the President’s promise of “bankrupting” the coal industry. If America is to reach energy independence in an affordable, reliable, and practical way, then coal should be part of that plan.
The IEA report also estimates renewables having the potential of becoming the world’s second-largest source of power generation by 2015 and closing in on coal by 2035. Not surprisingly though, the increased usage of renewable production is highly contingent on continued amounts of subsidies for these industries. Due to the fact that these industries have to rely on subsidies to be viable, it shows that they are not the most affordable and reliable paths to energy independence.
If the United States is to realize its energy potential and become energy independent in a cost effective manner, it will have to be pursued through the increased production of oil, coal, and natural gas. With the vast supplies of these resources, it is not a question of if we can achieve energy independence; it is a question of when. The question of when can be accelerated once the Obama Administration embraces the vast natural resources this country possesses and increases access to these resources on federal lands. Sensible public policy and market forces, not legislation and bureaucracies will achieve energy independence affordably.