NARUC study finds U.S. economy has much to gain from responsible onshore and offshore energy exploration – and much to lose under restrictive status quo
WASHINGTON, D.C. – February 15, 2010 America’s reliance on foreign countries for its energy will grow by 19 percent over the next 20 years, accelerating the transfer of U.S. wealth to members of OPEC by more than $600 billion. That’s just one of the startling conclusions found in a new report issued today by the National Association of Regulatory Utility Commissioners (NARUC) at the group’s winter meeting in Washington – all, assuming a scenario in which policy-makers keep intact decades-old restrictions on accessing America’s abundant, available energy resources.
“It’s easy to measure how the positive development of energy contributes to the creation of jobs, the generation of government revenue, and the stabilization of energy prices,” said David Holt, president of Consumer Energy Alliance (CEA), and a presenter at NARUC’s meeting this week. “It’s a lot harder trying to assess the opportunity cost we’re forced to pay by not producing that energy – how many jobs we stand to lose, how much additional money we’d have to send to OPEC. Now, thanks to this NARUC study, we have such a relative indicator. And let me tell you: It’s not pretty.”
The NARUC study, assembled by experts from the Science Applications International Corporation (SAIC) and the Gas Technology Institute, broadly examines the social, economic and environmental impacts associated with the continuation of a policy that has for generations kept billions of barrels of American oil and trillions of cubic feet of American natural gas under statutory (and de facto) lock-and-key. To do that, the study first provides the most up-to-date assessment of America’s onshore and offshore oil and natural gas resources. It then uses the well-respected National Energy Modeling System (NEMS) to render a quantitative summary of the jobs, revenue and even number of “housing starts” Americans should expect to surrender in the future under the status quo energy policies of today.
“Higher energy prices, greater volatility, expanded foreign dependence, and $2.3 trillion less for everyday Americans to spend – and that’s just the tip of the iceberg,” added Holt. “The good news is that this report describes a scenario for the future that we don’t have to accept – and mustn’t. The bad news is that, despite overwhelming support for new energy exploration among the American people, the inertia of inaction that has defined this debate will be difficult to reverse. With the help of this report, though, it’s my hope that it’s an effort about which we will finally get serious.”
The following represent some of the key findings contained in the study – again, modeled under a scenario that assumes energy resources on federal lands (onshore and offshore) currently locked away continue to be denied to the American people in the future:
- American production of crude oil: Projected to decrease – relative to a scenario in which we decide to produce our offshore energy resources –by 9.9 billion barrels, an average annual decrease of nearly 15 percent;
- Imports of oil from OPEC: Projected to increase by 4.1 Billion barrels, an average annual increase of nearly 19 percent, resulting in increased cumulative payments to OPEC of $607 Billion;
- American production of natural gas: Projected to decrease by 46 Tcf – an average annual decrease of nearly 9 percent;
- Employment (energy intensive industries): Projected to decrease by nearly 13 million jobs;
- Housing Starts: Projected to decrease by nearly 200,000;
- Annual average natural gas prices increase by 17 percent;
- Annual average electricity prices increase by 5 percent;
- Real disposable income: Projected to decrease cumulatively by $2.34 trillion;
- Energy costs to consumers: Projected to increase by $2.35 trillion – an annual average increased cost of 5 percent;
- Gross Domestic Product (GDP): Projected to decrease by $2.36 trillion;
- Real Consumption: Projected to decrease by $1.44 Trillion.
For more information, visit www.naruc.org.