America’s Resource Renaissance

American oil industry leadership groups such as the National Petroleum Council and the American Petroleum Institute have been meeting in recent months to fashion new frameworks for the industry to ensure best practices for oil and natural gas drilling. That’s the good news. The bad news is that the task at hand is proving highly complex, and so far, the industry seems to lack consensus on how to move forward, especially on the topic of how far it can go in policing itself.

Much is a stake. As my new article in Foreign Policy magazine explains, I explain how technological and geopolitical factors are combining to shift the focus of the international oil industry back to the Americas. The possibility exists that the United States could see a resurgence back to its mid-20th century preeminent place in the global energy industry, with our vast endowment of unconventional reserves and innovative technologies coming to the forefront of global energy supply. It is ours to lose.

There is no question that the turmoil in the Middle East could disturb its leading role in fueling the global economy. This would mean that tapping the energy potential in the United States, Canada, Mexico and Brazil will be all the more important.

Industry best practices will be critical to the United States being able to be a global leader in energy technology and resource development. The industry is putting much effort into getting this right. But policing itself can only go so far, especially in onshore operations where the number of operators is so large.

As Presidential candidates debate the merits of government “regulation” of business and the wonders of “getting out of the way of business,” let us not forget that even Republican candidate Governor Rick Perry of Texas has signed legislation requiring the public disclosure of fracking fluids.

The reality is that there is no substitute for sound regulation and the industry’s endorsement of good public policy would ensure the goals that the industry is seeking in its own fora. An independent arbiter for implementation of oversight of best practices is the best way to get the industry out of its how-to-police-itself bind. Either an independent agency modeled after Canada’s chief safety officer paradigm or well trained state or federal government regulators ensure that sound practice will lead to a healthy industry and safe and enduring access to the rich endowment of resources available in the United States.

With so much at stake to our national interest and the global economy, a strong industry voice rejecting the nonsensical “no regulation of business” argument in American politics would be welcome.