The Irrefutable Importance of Oil and Gas

AdobeStock 25508073
AdobeStock 25508073

President Calvin Coolidge famously and accurately once said, “the chief business of the American people is business.” In his provocative book The Moral Case for Fossil Fuels, Alex Epstein asserts that the oil and gas industry makes every other industry flourish. Since Col. Edwin Drake’s 1859 discovery well in Titusville, Pennsylvania, the United States has enjoyed a long history of developmental, operational and technological achievements in the oil and gas industry. It is not hard, then, to understand how American business has led, and continues to lead, the world: American ingenuity combined with American capitalism, running on energy and built with products provided by the oil and gas industry, resulting in American dominance and exceptionalism.

Unfortunately, for those who have never needed to understand, these basic truths effectively don’t exist, leaving open the possibility, if not the likelihood, that many will never know exactly why they enjoy the advanced comforts and amenities provided by oil and gas that they do on a daily, widespread basis without question. And when you don’t know why, you also don’t know why it needs to be zealously guarded.

Oil and natural gas have not only provided fuel for transportation and energy sources for electricity, but their exploitation through fractionation and refining has generated an almost endless list of products and essential ingredients in products that we use every moment of every day. It has become clichéd to observe that without oil and gas we would not be in much better shape than the cave man; but it is almost a certainty that the average American has little or no knowledge of the pervasive benefits of the oil and gas industry.

Despite Coolidge’s accurate, even proud, statement about what drives America, a more recent President, George W. Bush, seemed to apologetically observe that America is “addicted to oil.” One President observed that America’s strength was business (business increasingly fueled by oil), while another President observed that oil is our weakness — an addiction — and we all know where addictions ultimately lead.

It is no more accurate to describe oil and gas as an addiction than it is to describe food in that way. Addictions lead to bad results — but can anyone really look at the mind-boggling progress that our nation (and the world) has made because of abundant, affordable, reliable and naturally concentrated energy in the form of fossil fuels and characterize that progress as a “bad result?” Those who try to take such a position aren’t being intellectually honest; rather, they are hypocritically — and comfortably — condemning the source of their comfort. This position is the ironic admonition of the affluent and indolent. It marks the unfortunate point in the evolution of American success when too many people no longer have to work hard to enjoy the comforts and amenities that are now taken for granted by the average American — amenities that are even demanded as “rights” but are unknown and only dreamed about by much of the world’s population.

It is for this very reason, which is obvious to those whose common sense hasn’t been dulled by propaganda, that oil and gas are so highly valued around the world. Those who have it know that; those who don’t have it wish they did. Therefore, oil and gas have been, and will continue to be, an important geopolitical tool. U.S. geopolitical strategy is much different when we are not dependent on other countries, especially those who are sometimes hostile, for imported oil and gas.

In Daniel Yergin’s Pulitzer Prize-winning book The Prize: The Epic Quest for Oil, Money & Power, we are reminded that, when commenting on the critical role oil played in ending World War I, Lord Curzon stated: “The Allied cause floated to victory upon a wave of oil.” Similarly, it can be said that U.S. oil played a role in defeating the Axis powers in World War II. The seemingly endless conflicts in the Middle East, and the United States’ role in them, has undoubtedly had a lot to do with our long-standing concern about future sources of imported oil.

But when you have enough oil and gas to become a net exporter to other countries, geopolitical decisions suddenly can be driven by other considerations. When combined with the known reserves in both Canada and Mexico, it becomes realistic to see a day in the near future when North America could be energy independent. Mexico took a historic step in 2013 to unlock their massive reserves for modern development, when they decided to amend their constitution and allow foreign investment and partnership 75 years after the oil and gas industry was nationalized. Despite the drop in crude oil prices in the world market during the 2014–16 bust, Mexico has stayed the course by offering properties at auction for development by foreign companies and breaking up the monopoly previously held by PEMEX, the national oil company. Incredibly, companies like ExxonMobil, Chevron, BP and Shell are actually opening retail gas stations throughout the country. The U.S. is building several pipelines, transporting natural gas and refined products from Texas to Mexico. The opportunities for great progress and benefit to Mexico are almost too significant to fathom.

But the capacity for man’s ability to fumble a sure touchdown is equally limitless. Mexico will be voting for a new president in 2018, and the leading candidate is campaigning to undo the reforms enacted in 2013. President Trump is threatening to undo NAFTA. Environmental activists in the U.S. are hell-bent on disrupting construction of new pipelines and refineries, as well as stopping hydraulic fracturing and generally doing everything they can to stifle the continued use of oil and natural gas for any purpose. Other world producers of oil and gas, like Russia and the various OPEC nations, are delighted and hopeful that we will somehow figure out a way to reject our current advantage and self-impose a vow of energy poverty.

Of course, anti-oil apologists will simply respond that the health of the planet outweighs any of these other considerations. But is it the health of the planet or the health of humanity or the health of our nation that should guide our decisions? Should that fateful day ever come when a hostile nation has America at an inescapable disadvantage because of our imprudent policy decisions regarding energy, there will be few, if any, finding solace in their relief that beetles, salamanders and lizards are thriving and global temperatures have risen only .01 rather than .02 degrees.

 

About the author: Bill Keffer is a contributing columnist to SHALE Magazine. He teaches at the Texas Tech University School of Law and continues to consult. He served in the Texas Legislature from 2003 to 2007.

 

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