According to an analysis commissioned by Securing America’s Future Energy, in 2007 alone OPEC’s manipulation of supply cost Americans at least an extra $115 billion in higher gasoline prices – extracted rents that we could have invested in our own economy, rather than sent to regimes that are ultimately hostile to our values and interests. This number does not include the untold resources expended by the U.S. military to patrol and protect oil lanes and infrastructure, especially in the Persian Gulf.
However, if Washington puts in place the right policies that both expand domestic production and reduce oil consumption, we can limit our exposure to OPEC.
The Obama Administration should stop stymieing the oil and gas industry from producing more here at home. In recent years, thanks to the private sector’s entrepreneurs and engineers who have pioneered advanced recovery techniques, America’s domestic oil and gas production, once thought moribund, has boomed. Last year, domestic oil production grew by approximately 14 percent, up to a level not reached since 1997.
Washington needs to open up more federal lands and waters to new drilling projects in order to produce even more oil. The Obama Administration also needs to finally approve the Keystone XL pipeline. These measures will support further increases in oil and natural gas production, strengthening job creation and overall economic growth, especially during debilitating oil price spikes that endanger America’s economic security.
In turn, a portion of the revenue generated by the new drilling on federal lands and waters should be invested in an R&D trust fund to help develop new technologies to diversify our transportation fuel base, as well as use oil more efficiently. This would produce the necessary basic innovation without raising taxes, and without government picking well-connected corporations as winners and losers, as was the case with Solyndra.
I am deeply concerned by the apparent politicization of government programs under the Obama Administration in support of electric vehicle development. Yet, electric vehicle technology is actually uniquely advantageous in the fight against OPEC, because electricity can be fueled by multiple sources, including coal, natural gas, and nuclear. Ohio coal should be burned to generate electricity used to power electric vehicles and, as a result, displace oil-based gasoline. We should invest in innovative research to foster oil displacement, not an environmentalist agenda.
We cannot idly sit by as OPEC continues to rig the global oil market to our detriment. American fiscal and national security demands that we finally get serious about producing more and consuming less.