Letter from Ohio: Credit and energy, the economy’s twin tracks
The economy of the United States and all other developed countries rides along on two rails – credit and energy. Anybody who has read a newspaper in the last three years is aware of the problems caused by tightening of credit following the near collapse of the housing market, particularly for small and start-up businesses, which generally provide growth in the economy.
If the ongoing public relations attack on current sources of energy results in purely political choices of energy development, we face the very real scenario that the American economy could really end up in the ditch. When the last recession hit the United States in the 1970s, no other country’s economy could grab the baton and assume a global leadership role, so investment in America was still the foundation of any recovery plan. This is no longer true, and highly respected people like David Walker, the U.S Comptroller General for three different presidents of both parties, is now saying we have about a three-year window to get it sorted out, before European-style economic crisis overtakes us.
Although the Environmental Protection Agency has taken the regulatory lead on energy matters, (Politico magazine awarded its administrator, Lisa Jackson, the “Policymaker of the Year in Energy” last week) it appears that dozens of federal agencies are working overtime to ban one energy source where we are the top producer in the world, and to restrict everything else except wind and solar facilities.
Saskatchewan Premier Brad Wall told a group of us last week that our country is trying to delay or kill an oil pipeline that is desperately needed for our economy to recover, and would produce 20,000 jobs along the 1,700-mile construction path alone. He explained that if the U.S. government is successful, Canada will build it to the Pacific coast instead and China will get all of the oil, while we can only increase our exports from Saudi Arabia and its neighbors.
Why is the pipeline not one of our top national priorities? Well, it would mean that the United States and our chief trading partner would supply 92% of our liquid fuel needs by 2030. But renewable energy portfolio standards now under legislative review in Ohio and existing in many other states, dictate that 20%, 30% or 50% — depending on the state and the deadline year — of our energy must come from renewable sources by then. (Not hydropower. It doesn’t count!)
Investors and manufacturers in the emerging green technologies aren’t arguing that we should shut down the country until wind and solar can take their rightful place among energy sources, but regulatory harassment and delay can accomplish much the same result.
North Dakota has the lowest unemployment rate in the country at 3.5%, and oil production in the Baake play is a major reason. The state may soon become the country’s second-largest oil producer state after Texas. Three federal agencies are trying to slow down the production, including one subpoena issued last month to investigate whether or not oil exploration and production there is violating the Migratory Bird Game Act.
All of this is relevant and critical for the future of Ohio. Pennsylvania and Ohio have the chance to become major contributors to the national recovery because of new technology for energy production. Every dime of state funds and every law on the books needs to be aligned with real world economics and state-of-the-art technology.
George Lucas and Disney can create worlds where we might love to live, but here on Earth, BTUs and availability of credit signify prosperity, depending on the cost. We have lost 5.7 million manufacturing jobs nationally in the last ten years, and higher energy prices will push many other industries offshore, no matter what this administration or the next one says.
You should follow the current debate on renewable portfolio standards because, in Ohio and many other states, everything that happens to energy producers happens to you.
