California loves to be seen as the trendsetter on energy and environmental policies. But can we really afford to adopt their laws and regulations in the rest of America? Heck, can the once Golden State afford them itself? The path to hell is paved with good intentions, counter-productive policies – and hypocrisy.
The official national unemployment rate is stuck at 6.7% – but with much higher rates for blacks and Hispanics and a labor participation rate that remains the lowest in 35 years. Measured by gross national product, our economy is growing at an abysmal 1.5% or even 1.0% annual rate.
Meanwhile, California’s jobless rate is higher than in all but three other states: 8.1% – and with far worse rates as high as 15% for blacks, Hispanics and inland communities. First the good news, then the insanity.
Citigroup’s Energy 2020: North America report estimates that the United States, Canada and Mexico could make North America almost energy independent in six years, simply by tapping their vast recoverable oil and gas reserves. Doing so would help lower energy and consumer prices, insulate the three nations from volatile or blackmailing foreign suppliers, and spur job creation based on reliable, affordable energy, says the U.S. Energy Information Administration.
Driving this revolution is horizontal drilling and hydraulic fracturing. According to Citigroup, IHS Global Insights, the EIA and other analysts, “fracking” technology contributed 2.1 million jobs and $285 billion to the US economy in 2013, while adding $62 billion to local, state and federal treasuries! Compare that to mandates and subsidies required for expensive, unreliable, job-killing wind, solar and biofuel energy.
Fracking also slashed America’s oil imports from 60% of its total petroleum needs in 2005 to just 28% in 2013. It slashed our import bill by some $100 billion annually.
By 2020 the government share of this boom is expected to rise to $111 billion. By 2035, U.S. oil and natural gas operations could inject over $5 trillion in cumulative capital expenditures into the economy, while contributing $300 billion a year to GDP and generating over $2.5 trillion in cumulative additional government revenues.
A Yale University study calculates that the drop in natural gas prices (from $8 per thousand cubic feet or million Btu in 2008, and much more on the spot market, to $4.00 or so now) is saving businesses and families over $125 billion a year in the cost of heating, electricity and raw material feed stocks.
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