Late last month, the Progressive Policy Institute (PPI) released the fourth installment of its annual report outlining the top companies investing in America today. But despite their overall findings that we are still suffering from a significant lack of investment and business capital spending, there are those who are still “betting on America’s future,” especially in the energy industry.
In their report titled, “U.S. Investment Heroes of 2015,” PPI confirmed that once again, the United States energy sector is the second largest sector investing in U.S. business development and initiatives that significantly raise productivity and wages across the economy. Across all their reports published from 2011 to 2014, the U.S. energy sector invested more than $201 billion in domestic buildings, equipment, and software.
But these findings should come as no surprise as the U.S. is currently experiencing a historically record breaking transformation in our energy landscape. Once a nation dependent on foreign suppliers for energy, in 2014 the U.S. became the world’s top producer of petroleum and natural gas, surpassing both Russia and Saudi Arabia. As a result of technology innovations, the energy sector supports over 9 million jobs and supplies millions of dollars in high paying wages to families across the country.
The economic benefits from America’s oil and natural gas industry contain lessons for the economy in general and why there is room for more growth in the oil and gas industry. That is why it is important for lawmakers to encourage pro-growth energy policies now if we hope to see further investment and build on the economic benefits experienced so far.
The good news is there are already a number of initiatives that could provide widespread economic opportunities for both energy investors and American consumers. Expanded trade of our growing abundance in energy resources is a pro-growth opportunity that has fallen squarely into our laps and must be addressed.
America’s current ban on crude oil exports, enacted in the wake of the 1973 Arab oil crisis to insulate against disruptions in supply, is one of the most obvious examples of outdated energy policy that threatens future investments, economic growth and job creation here in the U.S. The ban precludes domestic producers from the international market and has created a bottleneck of supply at the few U.S. refineries capable of processing the light-sweet oil produced here at home and a surplus of products with nowhere to go.
As a result, many domestic producers have curtailed their operations. Oversupply coupled with the current low prices has generated an environment not suitable for further investment by this industry. In fact, the number of active rigs in the U.S. had already fallen 60 percent since last year. Removing the ban on crude oil exports would open U.S. supply up to global markets and would provide greater opportunities to the industry and result in additional capital investment that also creates more jobs..
Modernizing the regulatory process for exports of liquefied natural gas (LNG) is another policy initiative currently before Congress that would spur continued energy industry investment for decades to come. The bipartisan proposal that would speed up approval of permitting applications to export LNG to countries without free trade agreements will secure huge investments needed for terminal construction, generating additional jobs and state and local tax revenues.
The nation’s energy renaissance should be a reason to open up our energy markets, not restrict them. Advancements in technology have allowed the energy industry to invest, innovate, and expand, not only putting North American energy on the map, but also serving as an economic benefit for millions of Americans. It is clear that a thriving energy industry is an important contributor helping our economy thrive as well. Applying free trade policies to our abundant energy resources, will undoubtedly unleash additional growth opportunities that are an important part of getting back to the growth that has historically characterized the U.S.
It is time our leaders be held accountable for our economic future. We need to demand that the rhetoric of free trade be replaced by action before we lose the opportunity to take advantage of our historic energy renaissance.