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We All Have a Stake in the Energy Business

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When Karen Alderman Harbert, head of the U.S. Chamber of Commerce Institute for 21st Century Energy, called herself an environmentalist, I was tempted to scoff. After all, it’s her organization’s job to promote the energy business, which often puts her at odds with environmental interests. But by the time she finished speaking, I realized her views are not all that different from my own.

Harbert spoke May 4 at the AISI/MSCI conference in Chicago. As she pointed out, North America sits atop the largest fossil fuel reserves in the world, which could fuel prosperity for generations to come. Yet, development of those resources has happened in spite of—rather than because of—government policies. “North America can be an energy superpower if we want it to be. But rather than approach it with reluctance and trepidation, the nation needs to embrace it,” she said.

Everyone has a stake in today’s energy renaissance. Thirty-three states produce fossil fuels in one way or another, and the 17 that don’t benefit indirectly as part of the supply chain. In the next 20 years, if the U.S. is successful in developing these resources, it will add four million new jobs and $2.5 trillion in revenue to the economy, she said.

China and India have made energy their top priority, recognizing its importance in meeting the needs of their enormous, urbanizing populations. That is not the case in the United States, Harbert said, where energy exploration remains tightly restricted on federally controlled lands and the exporting of crude oil has largely been banned since the 1970s. Loosening the restrictions on oil exports alone would create thousands of jobs and generate millions in new revenues. “If we want to become a major exporter, we need to get into the game,” Harbert said.

The U.S. is in dire need of infrastructure improvements, such as new transmission lines and refineries to handle all the new oil and gas. Yet it takes 18 years to get a new pipeline built in this country—16 years to go through the painstaking permitting process, plus two years for construction. In China, that would take 18 weeks, she noted.

Public opinion is critical to the progress of energy policy. Opponents of fossil fuels are going door to door to protest fracking, Keystone XL and other energy projects. “As business people, you need to do a better job of communicating how integral it is to your success to have affordable and reliable energy in all forms,” she urged her audience of steel executives.

When it comes to energy and the environment, it is not an either-or proposition. Every American has a stake in both, she concluded. “We all want clean air and clean water. We all want to do the right things. But we have to look at how to do them in the most economically efficient way.”