A Marshall Plan for Energy

30: Both Europe and America have about 30 LNG terminals under consideration — more than enough for the free-Europe goal. But Europe has only six LNG import terminals currently under construction, and America so far is building just two export terminals. Build-out would happen fast on both sides of the Atlantic if Congress voided the antiquated (and anti-free-trade) law that constrains American gas exports. And on the petroleum front, it would take less than 30 days for crude exports to start flowing if Congress voided another outmoded four-decades-old law, which bars American oil producers from selling their product overseas.

50–80: More than 50 percent of America’s land and 80 percent of its offshore waters are controlled by the federal government. Political and regulatory heel-dragging has led to a decline in hydrocarbon production on federal lands over the past six years, while output has boomed on private and state lands. Encouraging increased production on a tiny fraction of federal lands would unlock more than enough additional output to free Europe.

300: At least $300 billion would flow into America’s economy over just four years if the E.U. replaced half of its purchases from the former Soviet Union with U.S. fuel. Contrast this with the original Marshall Plan, which greatly helped Europe, but at a cost to the U.S. of $150 billion over four years (in today’s dollars).

In reality, complete E.U. independence from Russia is neither needed nor desirable. But America’s industrial and technological capabilities are so clear that merely announcing the resolve to halve Europe’s Russian energy purchases would rock the geopolitical boat. Such a game-changer would take just two simple steps. And, frankly, taking only the first step and leaving all else as is would still open the floodgates.

First, Congress could — and should — eliminate the Department of Energy’s inappropriate role as gatekeeper for natural-gas exports and rescind the Department of Commerce’s authority to prohibit petroleum exports. Our European allies are keenly aware of these legacy constraints. In early July, the Washington Post published an E.U. document leaked from the trade negotiations with the U.S. that bluntly called for an end to America’s ban on oil exports.

The requirement that American producers seek permission to sell a commodity overseas is unique to the energy business and a legacy of old-think from decades ago, when policymakers and pundits failed to appreciate the role of energy innovation and America’s “can do” entrepreneurs.

Second, the U.S. should — whether by executive order or congressional legislation — remove the regulatory and political impediments that hamper the private sector in financing, building, and operating capital-intensive infrastructures to access and transport hydrocarbons in both the heartland’s shales and untapped offshore fields.

Modern technology, from iPhones to Boeing 787s, from big-data analytics to 3D printers, has not made the world less vulnerable to energy dependencies or energy blackmail. But technologies, in particular American technologies and companies, have unleashed astonishing quantities of hydrocarbon resources, which make possible a modern Marshall energy plan. The short- and long-term benefits would rival the original Marshall Plan’s storied achievements during the first Cold War.

Mark P. Mills, a Manhattan Institute senior fellow and a director of the Marshall Institute, is the author of the Manhattan Institute paper “Prime the Pump: The Case for Repealing America’s Oil Export Ban.”

 

This article appeared on the National Review Online website at http://m.nationalreview.com/article/384884/marshall-plan-energy-mark-p-mills/page/0/1

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