Business Perspectives

August 13, 2014

Commentary: Energy policy should encourage exploration, production

U.S. should adopt policies that facilitate energy independence, rather than create regulatory and political obstacles to producing more oil and natural gas.

America’s energy revolution has changed the global landscape. The U.S. has surpassed all expectations and achieved a level of domestic energy production that was unthinkable even five years ago.

We are now the No. 1 producer of oil and natural gas. Instead of importing liquefied natural gas to supply our own power needs, we’re now moving to support our allies overseas as an exporter of LNG and possibly even crude oil.

While we can thank American oil and natural gas producers for the hard work and entrepreneurial spirit that made this possible, we must ensure that the elected officials in Washington respect the opinions of voters in Kansas and across the nation and work with us to ensure that our nation achieves its full energy potential.

What we need from our elected leaders are smart energy policies that promote our nation’s position as a leader in energy production.

This change in circumstance was not due to government policies or foresight. In fact, it has been in spite of federal government policies. We are a global leader thanks to American oil and gas producers who are committed to investment and job creation in the U.S. and are using technology and innovation to access more oil and natural gas reserves.

As a result of America’s unique private property and free market system, our nation’s energy landscape has dramatically improved; we’ve gone from scarcity to abundance. Entrepreneurs in the private sector and smart, state-led policies have created and will continue to drive American energy production leadership. And no state is a better example of what good energy policy can mean than Kansas.

For decades Kansas has been at the forefront of all aspects of the American energy sector and continues to be a leader. The men and women of Kansas have long demonstrated that developing energy resources that promote economic growth and provide well-paying, stable jobs for families need not come at the expense of the state’s natural beauty, delicate ecosystems and other natural resources.

A balance that’s reflected in our Kansas congressional delegation, which continues to be steadfast voice of reason and an important ally in our effort to promote safe and effective pro-energy development policies in the nation’s capital.

I think lawmakers and regulators in Washington could learn much from how Kansas’ oil and natural gas industry, Kansas state regulators, and Kansans from every part of the state work together to create energy policies that encourage safe and responsible energy development, protect the environment, and provide well-paying jobs.

Nationally, America’s oil and natural gas industry supports about $1.2 trillion in U.S. gross domestic product and provides $85 million a day to the federal government through royalty payment and taxes. And the industry supports 9.8 million jobs, 5.6 percent of total U.S. employment, but we could do much more with the right energy policies. Further, with the right energy policies the industry could support as many as an additional 1 million American jobs in seven years and more than 1.4 million by 2030.

Yet for reasons of political ideology, for the last several years, the federal government has shown virtually no interest in promoting new energy development on the lands and waters it controls. A recent Congressional Research Service study found that in federal areas, production from 2009 through 2013 was down 6 percent for crude oil and 29 percent for natural gas.

In contrast, on private and state lands, where development does not need permission from the federal government, oil production is up 59 percent and natural gas production is up 33 percent. This difference is not due to geologic science, but rather political science.

That’s not only bad politics; it’s bad policy, and it is an unnecessary drag on a still shaky economy.

The choice before us is whether we pursue an American future of energy abundance, self-sufficiency and global leadership or take a step back to an era of American energy scarcity, dependence and economic uncertainty.

When we hear calls for higher taxes on American oil and natural gas companies, or greater regulatory burden on U.S. businesses without any basis in science, we see a political agenda at work – at the expense of American consumers. Politics should not drive energy policy.

We must reject the outdated political ideology of the professional environmental fringe and refuse to let political orthodoxy drive rulemakings or decisions on energy policy. We must ignore the irresponsible and unrealistic “off-fossil-fuel” agenda pushed by some. We must make it clear to our elected leaders that energy policy should not be a partisan talking point because it is too important to our way of life.

The fundamental question is whether we have the foresight to manage our immense energy resources in a way that generates the kinds of jobs, revenue and opportunity that have been the hallmark of our nation and the oil and natural gas industry since the very beginning. Or will we squander this once in a lifetime opportunity on the altar of political expediency and ideology.

Future generations are looking to us to get our nation’s energy policy right. They are counting on us to leave them a country that is second to none in energy production, security, and economic prosperity.

Edward Cross is president of the Kansas Independent Oil & Gas Association. For more informatio, go

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