Dennis Blair is co-chair of the Pacific Energy Summit and the former director of national intelligence and a retired Navy admiral.
It is time for American policymakers to think comprehensively about energy and environmental security. The United States is on a path to producing as much total energy as it consumes, thanks to increasing levels of efficiency throughout the energy economy and technological advances in domestic oil and natural gas production. Meanwhile, global energy demand will increase by a third in the next 20 years, with 60 percent of that additional demand coming from China, India and the Middle East. Sound national energy policies balance four parameters—security of supply, affordability, sustainability and safety.
Abundant and inexpensive natural gas (costing as little as one-fifth the price in Asia) has increased U.S. global competitiveness, especially for the manufacturing sector. According to an American Chemistry Council study, this price advantage will spur an estimated $72 billion in new investment in eight primary gas-consuming industries over the next couple of years. Moreover, exports of natural gas to Asia would bring economic benefits to the United States. To sustain their rapid growth and domestic demand, the Asian Tiger economies require fuel. Meeting Asia’s needs would generate billions of dollars in direct investment in the United States. This, in turn, would create domestic jobs in energy extraction, processing, refinery infrastructure, trade and financial services.
The Keystone pipeline has assumed a symbolic importance far beyond its reality. Approval would decrease American oil imports from volatile and hostile regions like the Middle East, a good thing. It will not affect American gas prices—they are set by the world market—nor the global environment since 80 percent of the greenhouse gases from a barrel of oil come out of the vehicles burning the gas it produces, not the extraction process. Thus, this seems to be a decision that can be made on a business basis.
Unfortunately, the debates over both natural gas and Keystone have failed to discuss safety adequately. If Americans had confidence in the security of the energy extraction and transportation operations, then it would ease some of their environmental concerns. The history of fracking and deepwater wells has given them little cause for confidence.
Dangerous materials and activities can be managed safely. The armed forces have been doing so for generations. The keys are: mandatory use of the safest equipment and procedures continually improved by research; certified training for operators who must follow strict procedures that emphasize safety above all; and, independent and competent inspection teams that continually check on operations and have the authority to halt them if conditions are unsafe. Regulatory bodies, whether governmental or independent, must enforce these standards and be funded to do so. No industry can regulate itself.
This safety-minded approach should be applied to both the Keystone and the natural gas export decisions. If the pipeline is approved, very high standards should be set for both its construction and operation. A tax on exported natural gas can be used to fund both competent regulatory agencies and research on safer and cleaner technologies for natural gas. We will always pay later the recovery costs from an energy disaster. We should pay now the more modest upfront costs required to prevent such a calamity.
- Read Pete Sepp: President Obama Must Abandon New Taxes on Oil and Gas
- Read Gregg Laskoski: Rail Helps Get North American Oil to Refineries For Less
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