With market forces and geopolitical turmoil driving up energy prices, it has become abundantly clear that America needs more energy and the ability to produce it at home.
Unfortunately, the policies of the current administration have left us in an untenable situation. The price of natural gas and oil has increased 100% and 60% respectively since the beginning of the year, and inflation is out of control for consumer products, partly due to high transportation costs and the fact that many of them are dependent on oil and natural gas in as part of their manufacturing process.
With no plan in place to remedy the situation, it is time for the President to rethink his current energy policy.
Under previous administrations, regardless of political party, domestic energy production was a priority. Several active and proposed infrastructure projects were underway to utilize our energy capacity and protect the wallets of American families. The United States has even become energy independent. Unfortunately, since President Joe Biden’s first day in office, we have had a complete reversal and we are now heading in the wrong direction.
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One of his first steps was to put in place a pause on all new oil and gas leases on federal lands. Although this was eventually lifted, it simply gave way to a federal rental plan this reduced the area available for rental by 80% and increased royalty costs.
Now that the Home Office is set to publish its five-year plan for offshore leasing at the end of this month, I fear we may not see the same thing. Our country’s ability to meet past production levels will be compromised, leading to increased costs for businesses and consumers.
The kind of hostile environment fostered by this administration will only deter investors, who seek the certainty of pro-energy policies that encourage investment over a 20-year period, from pursuing new energy development opportunities. Fears that the weed will be taken away from them by the Biden administration have only made the energy industry more hesitant. With gas prices over $5 a gallon, how can he continue to justify these actions?
Ultimately, these restrictive measures by the administration will affect the bottom line of all states and their economies. But Colorado, as a country fifth largest oil producer and seventh largest natural gas producer, will be one of the hardest hit. Responsible oil and natural gas development in the state contributes to more than $13.5 billion to the Colorado economy each year and supports tens of thousands of jobs. The Biden administration’s onerous energy policies threaten to drive out this engine of sustaining the economy and jobs.
The same goes for the prohibitive policies surrounding offshore leasing. Any further delay in releasing a new plan, or releasing a plan with overly restrictive provisions, will cost thousands of jobs, billions in lost revenue, and further damage America’s energy security. A study revealed that by 2036a halt to a five-year offshore leasing program could mean, nationwide, 885,000 fewer barrels of oil and natural gas per day from the Gulf of Mexico and a loss of 60,000 jobs.
Government interference in permit approvals is another obstacle to America’s energy security. Colorado growers have faced their fair share of state-level government blockades, from permit approvals to environmental lawsuits.
Similar obstacles at the national level would only exacerbate our energy crisis. For example, the recent cancellation by the Department of the Interior of an oil and gas lease sale in Alaska is anything but encouraging. At a minimum, this contrasts confusingly with President Biden’s claims that nothing prevents energy companies from increasing their production on federal lands to contain prices at the pump.
Environmental and conservation projects in Colorado would suffer if the Biden administration continues on its current path. Much of the income from offshore rentals goes to the Land and Water Conservation Fund, a program created to maintain national and state monuments and preserve the environment.
According to National Park Service, in the fund’s first 49 years of existence, it “provided more than $16.7 billion to acquire new federal recreation lands as grants to state and local governments,” through 40 400 grants. Like many states, Colorado Monuments benefit greatly from these funds and will immediately see negative effects if this revenue stream is eliminated.
The current energy situation in America is worse than it ever should have been, but what needs to happen next is clear. Providing a stable power generation environment by removing restrictions on oil and gas production on federal lands, quickly releasing a new five-year offshore lease plan, and accelerating critical power transmission infrastructure will help turn the tide of this current economic crisis and allow the United States to once again regain its energy independence.
Ken Summers is a state policy researcher at Centennial Institute and the former chairman of the Colorado House of Representatives Health and Environment Committee.
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