Our nation is on the cusp of the holy grail of energy independence and a jobs and investment boon that would accompany it – that is, unless it is stunted by over-regulation or blocked by extremist elements of the environmental movement who are peddling hysteria and fear.
That’s why we – a former oil company executive and the national leader of a union of construction workers – joined with others in a landmark forum in Metro Detroit this month called “Building Michigan’s Energy Future: How a Smart Energy Policy Will Create Jobs and Power Michigan’s Economy.” It was a remarkable and unlikely alliance of business and labor, as well as elected officials, including the top policy advisor for Gov. Rick Snyder.
It is not always easy to stand on common ground when positions are sometimes continents apart. But the solidifying of this alliance shows when the common good, common interest and key self-interests are served, it is possible.
Without increased energy production, the U.S. is certainly on course to an energy crisis. Already, the American Society of Civil Engineers gives our nation’s energy infrastructure a D+ grade, noting that much of our existing pipelines and electrical grid dates to the 1880s. Without significant investment it could be “lights out” for our children, who will live in a country where energy needs easily outstrip demand.
We can and should strive to produce more energy than we use, making it reliable and more affordable. Because of an increasing reliance on energy efficiency and renewable energies, coupled with a technology revolution in fields of natural gas and domestic oil, we can do that. In fact, the U.S. is on track to surpass Saudi Arabia in oil production within four years and in our generation become entirely energy independent. In just the next seven years, oil and gas recovered through hydraulic fracturing holds the promise of $305 billion in investment and 3.5 million jobs.
That investment will create demand for raw materials, supplies and services, further priming our economy. According to the U.S. Labor Department, every direct job in oil and gas extraction creates 2.3 jobs elsewhere, which in turn results in additional jobs as well as revenues for severely strapped treasuries from the local level to the federal government. Currently, it is estimated that oil and gas investments generate about $86 million a day in taxes across the U.S. A Michigan State University study found that $100 million of direct investment in natural gas facilities generates about $7 million in indirect tax revenue due to increased economic activity.
The jobs and revenue add up. As the pain from the worst recession since the Great Depression lingers, with more than 1 million construction workers still jobless, the energy sector is helping thousands of laborers to put food on their tables, pay their bills and get back on their feet. Nationally, members of the Laborers’ International Union – one of the largest construction crafts in the building of oil and gas energy infrastructure – has seen gas and oil pipeline work hours increase to at least 11.3 million in 2012, an increase of 18 percent from 2011. In Michigan work hours are on track to increase nearly 10-fold since 2008.
These are not just statistics, wells or pipelines. They are lifelines to good union jobs, pay that supports families, and benefits that protect the healthcare of workers and their kids and which provide a dignified and secure retirement.
But a war of fear being waged on these projects – from the Keystone XL pipeline to natural gas recovery in states around the country – threatens an energy renaissance. The war is filled with hysteria, with rhetoric of “carbon bombs” or the “future of the planet” hanging in the balance as if the solution to global warming was killing individual projects, rather than pressing for comprehensive climate change legislation.
Caution and reasonable regulation make good common sense. The best way to protect and grow an emerging industry is to make sure production is safe for workers, local communities and the environment.
Fear, and at times hysteria, is not unusual when new technologies are introduced. In fact, despite the ready availability of electricity in much of the U.S. in the late 19th century, it was often avoided and thought of as “dark light” – so much so that the Edison Electric Light Co. produced signs stating, “This room is equipped with Edison Electric Light .. the use of electricity for lighting is in no way harmful to health.”
There is no scenario where our energy needs will be met in the near or mid-term without significant oil and natural gas production. Extreme environmentalism offers no solutions. It’s time to move forward without fear toward the promise of an “all-of-the-above” energy renaissance. The fact that such a diverse crowd can coalesce around this as we did in Michigan is evidence it’s a goal we can reach.
John Hofmeister is former President of Shell Oil Co., founder of Citizens for Affordable Energy and author of “Why We Hate the Oil Companies.” Terry O’Sullivan is general president of the Laborers’ International Union of North America.