Clearing the Energy Logjam

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Clearing the Energy Logjam

At the turn of the century, many pundits predicted the nation would soon exhaust its domestic supply of crude oil and natural gas.  Even worse, according to those who believed in the "peak oil" theory, America wouldn't be able to satisfy its energy needs by buying from OPEC either, because even those countries would run out of oil and gas. 

The mistake those pundits made was to envision a future in which we'd still be relying on 20th century technologies.  Fortunately, recent innovative breakthroughs in energy extraction technologies—horizontal drilling and hydraulic fracturing—have dramatically transformed the energy outlook for the U.S.

Suddenly, vast new supplies of fossil fuels are accessible in underground shale formations within our borders.  At the same time, improved exploration and drilling technologies are unlocking the oil and gas that once had been considered inaccessible three miles beneath the Gulf of Mexico.  As a result, U.S. oil production has increased by 46.5 percent since 2007.1

Today, instead of facing a critical shortage of energy resources, the U.S. is the number-one producer of coal and natural gas, nuclear power, and renewable energy, including solar and wind power.  Currently third in crude oil production behind Russia and Saudi Arabia, the U.S. is expected to recapture the top spot on the rankings.

But even while America's new energy technologies have literally blasted through the natural limits of what once seemed possible, U.S. regulations and restrictions are placing artificial limits on the energy industry, threatening the nation's ability to benefit from its abundant resources.

What are these regulations and restrictions?  Here is an overview:

The U.S. currently prohibits drilling for oil and gas in several places where it is readily available.  In addition, several states, such as New York and California, have banned hydraulic fracturing.

The EPA created 588 pages of new regulations for natural gas wells where hydraulic fracturing is used.2  The regulations are designed to limit air pollution that potentially could result when gases from fracking fluids escape from wells.  Protecting the environment is obviously important, but the EPA regulations weren't necessary because state regulations already addressed the issue.  Due to the new regulations, drilling companies must comply with two sets of requirements for monitoring and reporting.

A study by Resources for the Future found that in 27 states with shale gas regulations, 16 of the 25 elements of the drilling and production process are regulated, with one or more state regulations, and often federal regulations, applying to each element...

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