Report: “Liberating the Energy Economy: What Washington Must Do”


The Manhattan Institute for Policy Research has published a new report, “Liberating the Energy Economy: What Washington Must Do,” detailing how America can “drill, dig, build, and ship its way out of the current economic and jobs malaise.” Written by Mark P. Mills, Senior Fellow at the Manhattan Institute, the report recommends lifting capricious regulations that are now suppressing American energy productivity. Below is his executive summary.

The United States is the largest single supplier of grains, accounting for about 40 percent of global exports. We enjoy the associated trade, jobs and revenue benefits that come from being the world’s breadbasket.

Technology is now doing for the American energy and fuel sectors what it previously did for the agricultural sector. In a complete reversal of the widely accepted energy paradigms of declining domestic hydrocarbon production, dependence and shortage, it is now realistic for America not just to feed the world but to fuel it as well.

Last year, the United States exported almost $140 billion in agricultural goods and about $120 billion in hydrocarbons. Within a year or so, we will likely export more fuel and petroleum products than food. Shortly after that, hydrocarbon exports will exceed those from information technology equipment, then quickly exceed automotive-sector exports. And this is only the beginning of what is possible.

Policies that accelerate hydrocarbon production could create at least 3 million jobs and $3–$7 trillion worth of economic benefits, radically resetting energy geopolitics.

The United States can quite literally drill, dig, build, and ship its way out of the current economic and jobs malaise. But we can do so only if the nation adopts new energy policies that reflect the technological, economic, and demographic realities of 2012.

Surprising all the experts, the United States has reversed a 40-year decline in oil output and has become the world’s fastest-growing hydrocarbon region. Recently, the U.S. became a net exporter of petroleum products for the first time since 1949. The same technology revolution has generated a flood of natural gas and a rush of applications to export it. Technology has helped drive coal exports to record levels as well.

In August 2012, the U.S. Energy Information Administration (EIA) released a summary of the nation’s “proven reserves” of oil and natural gas, recording the highest increase in the 35 years since the EIA began publishing estimates.

For all this, thank technologists and engineers, along with thousands of small, independent  producers. This growth in energy abundance occurred without policies intended to encourage it, and it has happened almost entirely on private and state—not federal—lands.

The new reality of hydrocarbon abundance makes possible not only energy independence but also a credible scenario in which the Middle East is displaced as the world’s primary energy exporter. Hydrocarbons currently supply 85 percent of the world’s energy, and every forecast sees them as central for the foreseeable future. Essentially all growth in global energy demand is now outside the U.S.

Yet our energy policy has evolved unintentionally to become complex, overreaching, and often capricious. Regulations are suppressing American energy productivity. We can bring to bear the power of technology to enhance the efficiency and transparency of the regulatory infrastructure itself, while preserving the intent and purpose of legislation. We should do this without overburdening the regulated and the regulators.

In order to liberate the new energy economy, policymakers should:

Hold the Bureau of Land Management accountable for the timely processing of applications;

Require the Department of the Interior to adhere to the statutory provision in the Federal Land Policy and Management Act;

Stop the BLM from arbitrarily designating huge new swaths of land as “Wild Lands,” thereby preventing access for resource assessment and for development;

Suspend BLM plans to add additional regulations to the process known as “fracking,” especially those redundant with existing state regulations;

Require that legal challenges to development be limited to those whose legal rights will be directly and adversely affected;

Require plaintiffs to pay for legal action dismissed on frivolous grounds;

Require science-based rule-making across the board;

Require cost-benefit analysis on the basis of established economic principles;

Open up current “off-limit” federal lands to exploration; Provide or facilitate the ability for agencies to share staff resources with those that are understaffed;

Make the R & D tax credit permanent to encourage innovation;

Explore non-federally funded mechanisms for financing energy technology demonstration projects (e.g., Clean energy bank concept).

Beyond specifics such as the aforementioned, there is a need to fundamentally reset the energy policy framework to fully unleash the enormous benefits from expanding hydrocarbon production and exports. The next president and Congress need to:

1. Pass omnibus energy legislation that is both pro-development and pro-export and that emulates the philosophy underpinning the North American Free Trade Agreement.

2. Establish a single federal portal for approval of all major energy projects, rather than subject applicants to multiple and sometimes conflicting or duplicative and time-consuming processes across myriad agencies; and

3. Declare a time-out on all new federal regulations. Given the crushing burden of 40 years of regulatory expansion, there should be an across-the-board suspension of implementation of all new rules, with the exception of those with near-term safety relevance. An interagency task force should explore how to use 21st-century information techniques to make sense out of the regulatory morass, enable sensible cost-benefit  analyses, and provide transparency and efficiency for citizens and businesses.

America is in the middle of an appalling jobs crisis. Dramatically increasing the production of domestic hydrocarbons—oil, natural gas and coal—offers the single biggest opportunity to generate jobs, especially those in the hard-hit middle class, and to create collateral financial benefits to state and federal treasuries.

Not in nearly 50 years has the energy “ground game” changed so radically. But capturing these opportunities requires bold policies. This positive energy future isn’t inevitable.

The United States could by default walk away from all these jobs and revenues, passing up the chance to become the major player in world energy markets. Should this happen, other nations will step in to fill the void.


  1. The big question is do we have the will power in Washington to make this happen? The current answer seems to be no, they are only interested in “green energy” ideas not hydrocarbons. They are unwilling to see the forest for the trees. If green was viable someone would be doing it without subsidies from the Federal government. When the public learns how much more expensive wind power is w/o the fed subsidies and incentives, there should be a revolt of the power companies. We do need to change the dynamic the Middle East has over our energy supply so that we are not beholden to them. With natural gas supplies expected to increase from fracking we could make that happen and completely turn the tables on the world order.


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