Energy development in Utah’s Uintah Basin is strengthening Utah’s economy. Nationally, energy development is one of the major factors — truly a bright spot — in the nation’s economic recovery. America enjoys the cheapest energy prices of any developed country, providing an important competitive advantage for many U.S industries.
What’s more, America has the near-term opportunity to become energy self-sufficient, and even become an exporter of energy products. That has the potential to change the geo-political balance of power and alter foreign policy and world affairs, reducing the power of Russia and despotic governments rich in energy resources.
Some international experts even say energy independence and export are the most important foreign policy initiatives the Obama administration could pursue.
A new Brookings Institution study says allowing U.S. crude oil exports will enhance energy security, benefit foreign policy, reduce U.S. gasoline prices and boost U.S. GDP while increasing jobs.
It’s important to note that America’s oil and gas energy boom has occurred despite lack of a national energy plan and despite a lack of support and encouragement from the federal government. The boom has been driven by dramatic advances in drilling and extraction technologies and has occurred almost entirely on private and state lands, while production has actually dropped on federal lands.
Jack Gerard, president and CEO of the American Petroleum Institute, said in a speech at the recent Uintah Basin Energy Summit that production on federal lands from 2009 to 2013 is down 6 percent for crude oil and 28 percent for natural gas. By contrast, on private and state lands, oil production up is 61 percent and natural gas 33 percent.
Numerous speakers at the summit said the federal government is a major hindrance to responsible energy development. Slow federal leasing and permitting processes are obstructing, rather than unleashing, America’s energy wealth.
In Utah, incredible energy resources lie beneath the surface of the Uintah Basin. It’s no surprise that Uintah and Duchesne counties enjoy the lowest unemployment rates in the state, at 2.9 percent and 2.4 percent, respectively. The two counties have the state’s highest average monthly household income, according to Uintah County Commissioner Mike McKee. He said about 11,000 wells are now producing in the Uintah Basin, with another 30,000 planned. If only 20,000 of those wells are drilled, the resulting direct, indirect and induced economic activity will total $123 billion. That’s not counting the enormous potential of oil shale and oil sands.
But because the federal government owns most of the land in the Uintah Basin, energy development is difficult and faces many challenges, especially transportation bottlenecks, environmental issues and slow federal leasing and permitting processes. We especially need transportation improvements to move product, including rail, pipelines and highway expansion.
I believe that energy can be extracted in an environmentally responsible way and, in fact, is the long-term key to a cleaner environment and a safer world. Carbon emissions today in the United States are at a 20-year low. That has very little to do with federal regulations and alternative energy, but a great deal to do with technology and private initiatives producing a natural gas boom. Abundant gas has replaced coal and fuel oil, and the result is cleaner air and reduced carbon emissions.
Abundant traditional energy and the economic prosperity that comes with it will actually ease and speed the transition to clean energy. Wealthy countries lead the world in carbon reductions. When people have good jobs, are well-educated, and families are economically secure, they become more environmentally aware and are able to afford electric cars and roof-top solar.
The fastest course to a clean environment and reduced carbon emissions is widespread economic security. Traditional energy development is the pathway to get there.
A. Scott Anderson is CEO and president of Zions Bank.