By EDWARD CROSS
Kansas Independent Oil & Gas Association

Debate continues across the country on our nation’s energy future. What is our best energy policy going forward?
Few doubt that energy has improved lives and enabled human progress. Yet one of the biggest challenges facing the world is the polarized debate over the future of energy. Facts and economics are too often replaced with assertions and emotions.

Discussion about fossil fuels and alternative energy sources often degenerate into a battle to delegitimize the other side. This is a recipe for inaction. And it keeps billions of people trapped in energy poverty. Almost 40% of humanity has access to only rudimentary forms of energy and a very low standard of living. The world expects and deserves better.

Energy Policy – In the 1970s, many experts forecasted a permanent energy shortage in the U.S. Fast-forward to today and we see the U.S. is the top producer of oil and natural gas in the world. Technological developments and efficiency gains have resulted in U.S. oil production doubling since 2008. U.S. oil production is now projected to grow another 50% over the next decade. The energy shortage predicted in the 1970s has not come true. In reality, we did not have an energy shortage in the 1970s, but had a shortage of imagination and loss of confidence in our ability to innovate.

Concerns About Carbon – Fossil Fuels are needed throughout the world to lift people up, which is different than a philosophy of embracing a zero-emissions world. Over 80% of the energy that the peoples of the world use to survive come from fossil fuels, because that is the cheapest, most plentiful, most reliable source ever developed. Anyone who cares about our environment and climate recognize that cheap, plentiful, reliable energy is essential.

Burning fossil fuels to generate electricity or provide power necessarily releases carbon dioxide (CO2) into the atmosphere. Carbon dioxide is a gas we exhale every time we breathe. Erupting volcanoes, decaying trees, wildfires, and the animals on which we rely for food all emit CO2. This by-product, which is essential for plant life and an unavoidable aspect of human life, is at the center of today’s climate change controversies.

There is vigorous debate about the effects of carbon emissions. The United Nation’s Intergovernmental Panel on Climate Change (IPCC) released its latest climate change report in October 2018. In case you hadn’t heard, we are all doomed. Yet, the world mostly yawned. But an EPA report released later in October 2018 shows the world may not be ending after all. According to new EPA data, greenhouse gas emissions, mostly CO2, fell 2.7% from 2016 to 2017. This downward trend is occurring even as U.S. oil and gas production grows dramatically.
Beware of Crocodile Tears – All too often state and federal proposals to tax carbon directly or launch new carbon tax schemes have much more to do with raising revenue than helping our environment. For those who prefer higher taxation to spending cuts, having an entirely new source of revenue is appealing. However, taxing carbon only takes more resources from the private sector to support swelling state and federal government.

A recent study analyzed probable effects of a U.S. carbon tax that starts at $20 per ton and then rises 4% per year, which is in line with recent proposals. The study suggested that such a tax would decrease household consumption, due to the increased cost of goods. The average household would have to pay 40% more for natural gas, 13% more for electricity, and more than 20 cents per gallon extra for gasoline. Costs would rise even more in subsequent years.

Price hikes like these can only mean lower standards of living and less opportunity. Families that spend a bigger portion of their household income on transportation, utilities and household goods are hurt, not helped, by carbon tax schemes that make traditional forms of energy more expensive.

Taxing carbon to tackle climate change is one of those big ideas that have long held a bipartisan sway. However, recent polls continue to show climate change lagging behind health care, jobs, immigration, and the federal budget deficit among voters’ priorities. In addition, fuel-tax riots in Paris in December and the defeat of a carbon-fee ballot measure in the state of Washington in November shows the difficulty of getting people to support a levy on the energy sources that heat their homes and power their cars. Public support for climate action appears to be broad, but it is shallow. Addressing climate change enjoys widespread approval, until climate action comes with a tangible price tag.

Citizens around the world will continue to reject climate policies that cost them personally, either by direct taxation or by undermining the competitiveness of their own economies.

The good news is that recent polls show that the American voter clearly want policymakers to set aside outdated assumptions and partisan talking points and work together on safe, responsible, and fact-based energy policy that grows our economy, creates well-paying jobs, and maintains our nation’s global energy leadership. Voters’ clearly expect their elected leaders to place what’s best for our state and nation’s economy and energy future above partisan ideology and political posturing.

A Better Way – The energy policy choices our nation makes today are among the most important and far-reaching policy decisions we will make in the 21st century. If we are to continue our nation’s positive energy trends, we must implement energy policies based on current reality and our potential as an energy leader. American energy policy should focus on what’s important: American jobs, American energy security, and American global energy leadership.

The U.S. currently has a better, more sensible approach to energy development than any other country in the world, both short-term and long-term. Where government policy has been absent, free markets have filled the void with great success.

Energy prices affect all corners of the economy, and keeping up with demand is essential for maintaining a high standard of living. Thankfully, that doesn’t require abandoning efforts to protect the environment. The key is to avoid placing unnecessary political or legal obstacles in the way of innovation and expansion. Let America’s entrepreneurs continue modernizing our energy technology as they work to meet growing demand. That’s a prescription for economic prosperity and a cleaner environment.

Just a few years ago, no one would have imagined the U.S. could increase production of oil and natural gas while cutting carbon emissions, which are now the lowest they have been in nearly seven decades. The oil and gas industry has proven that over the long-term, it is possible lead in energy production and environmental stewardship. By focusing on more efficient use of energy, it is possible to lower emissions without imposing a carbon tax or even more environmental restrictions.

An American energy policy that values innovation over regulation can turn energy policy challenges into great opportunities for economic growth and energy security. This approach is not just good business, it’s good stewardship and a much better strategy for improving the quality of life for all.

The fact is our nation’s 21st century oil and gas renaissance has made domestically produced oil and natural gas economical and abundant. This market-driven success has helped our nation achieve significant emission reductions. The oil and gas industry has helped prove, conclusively, that oil and gas production and environmental stewardship are compatible.

Going forward into 2019, we need smart pro-growth energy policies. Americans support developing domestic energy resources and believe that can be done in a way protective of our environment. Policymakers at all levels should pursue energy policies that drives economic growth, lower costs for consumers, protects the environment, increases American competitiveness, and uses our considerable energy resources as a way to lift people up. For our part, the oil and natural gas industry will continue our high standard of environmental stewardship.

Edward Cross is president of the Kansas Independent Oil & Gas Association.