The United States is blessed with vast and continually underestimated energy resources. America has more oil, coal and natural gas than any other country in the world. The US Geological Survey which publishes estimates of our reserves raises their numbers almost every year. For example early estimates of oil in North Dakota’s Bakken shale field were between 4 and 5 billion barrels of oil. They are now estimated to be over 24 billion barrels. Similar increasing estimates occur in Texas, Pennsylvania. Louisiana, Ohio, West Virginia and Arkansas.
No country has been as efficient, innovative, or environmentally sensitive in the extraction of oil and gas as the United States, and no country has done it as profitably before the pandemic and as they will after it.
Competition and reasonable regulation are part of the reason for our success, but there is another factor which is a distinctively American phenomenon. Are you ready for it? Ours is the only country in the world where mineral rights can be privately owned. In all other countries, the state owns the oil, natural gas, coal and other subsurface minerals. The incentive of private property rights, in fungible resources, propels the U.S. oil and gas business as nowhere else in the world. Nevertheless, federal policy is stifling our even greater potential.
Ninety-six percent of our production in the shale revolution has occurred on private and state lands over which the government has far less regulatory jurisdiction than on our federally owned lands. Alaska has huge untapped mineral resources, but the federal ownership of almost 70% of the state’s land prevents their efficient development. Of course as we are told daily, if the democrats take control of the nation next November further impediments will be instituted to insure that more of our vast energy resources remain in the ground.
If that unfortunate scenario does not play out, let’s consider how much could the federal government raise in royalties, drilling fees, and income taxes if it allowed drilling on federal lands? When one examines recent inventories of the USGS, the U.S. Energy Information Administration, and other private scholarly assessments, Steve Moore and Kathleen Hartnett White, in their book Fueling Freedom, concluded conservatively that at least 1.5 trillion barrels of oil were available and three quadrillion cubic feet of natural gas. The value of that energy is worth at least $50 trillion and amounts to 50 times the nations consumption.
It is no pipe dream to recognize that were sound energy policies to be instituted by our government, our nations gigantic debt, further increased to keep the public afloat through the current pandemic, could be paid down.
Reasonable estimates of oil production on federal lands reach a billion barrels of oil a day and corresponding increases of natural gas production for decades. While the pandemic has damaged energy production and sales throughout the world they will recover in no less time than it will take the country to move to allow the public to benefit from the resources currently held hostage by our government.
Moore and White estimate that the federal take would amount to $3 trillion when including income taxes on suppliers and other contractors involved in these production activities, plus income taxes on a million or more highly paid new employees of the exploration and production companies. Another $1trillion could be raised in similar fashion by state and local governments.
That is surely more than any bi-partisan deficit reduction plan could ever deliver. Understand I am not talking about drilling in Yellowstone Park or on the National Mall next to the Washington Monument . This is only about non-environmentally sensitive lands from the Arctic to New Mexico and offshore.
This national energy strategy would insure America’s leadership for decades to come and strengthen our national security by never again being dependent for oil on countries who are unfriendly to us. And yet it is the so called progressives of the western world who are standing athwart history yelling “STOP”.
Note: Portions of this article were excerpted from the book Fueling Freedom with permission of the authors Stephen Moore and Kathleen Hartnett White. Their book, in this authors opinion, is the finest treatise on US energy ever published.