2018: The Year Of American Energy

2018: The Year Of American Energy

By Brigham A. McCown, Forbes Contributor, January 25, 2018

 

It has been one year since President Trump issued executive orders allowing construction of the Keystone XL Pipeline and the Dakota Access Pipeline to proceed. Though considered contentious in the media, today we are witnessing the positive impacts that decision, along with policies more broadly designed to support the industry, have had on the American economy.

 

The administration's focus on domestic energy development and the corresponding infrastructure required to support it has helped domestic production levels reach unimaginable heights as the U.S. has now become the undisputed leader in oil and natural gas.

 

Expedited environmental reviews and faster permitting for high priority infrastructure projects gave strong momentum to the energy sector in 2017 that continues to build.

 

North Dakota raised $43.5 million in tax revenue solely attributed to the Dakota Access Pipeline's first five months in operation, far exceeding state expectations. That's no small amount to improve schools, hospitals, and community programs. Since the project began transporting oil in June, the pipeline has driven down transportation prices so much that energy production has surged in response. North Dakota added an extra 15 drilling rigs since last January, and peak production in the fall reached 1.185 million barrels of oil per day, an 11% uptick.

 

New pipeline infrastructure has helped shale production surge, reaching production numbers the industry could have never predicted a few years ago. Forecasts expect U.S. oil output will soon hit 10 million barrels per day, beating the record set in 1970. By the end of 2019, Reuters suggests we could reach 11 million barrels a day. With such a swell in oil production, the U.S. is expected to cut oil imports by at least 20% in the next decade.

 

Escalating production is also creating tens of thousands of well-paying jobs in rural areas. In the shale industry hub of Midland, Texas, for example, unemployment has dropped to 2.6 percent. In North Dakota, the picture was even brighter with the state posting a 2.3 percent rate of unemployment in November.

 

Record-setting energy production is not the only benefit being seen as construction workers lay more pipes in the ground. Trucks and trains are more prone to spills and fatal accidents than pipelines. Pipelines, on the other hand, are subject to a regulatory process at local, state, and federal levels that ensure safe construction and operation processes. In fact, a study by the Fraser Institute found rail transportation is 4.5 times more likely than a pipeline to experience an incident. The Dakota Access Pipeline has already reduced oil-train traffic in North Dakota from 12 trains to 2 daily, thereby enhancing the safety of local communities and their environments. Simply put, the industry favors underground pipelines not just for economic efficiency, but because they're a state of the art technology that provides the safest way to transport energy resources.

 

President Trump's order approving Keystone XL and the Dakota Access Pipeline exactly one year ago was only the beginning of an important year for the energy sector and that momentum continues to grow. President Trump's forthcoming infrastructure plan promises even more jobs and economic competitiveness for American energy.

 

This upward trajectory-one that transforms the lives of so many American families by providing tens of thousands of high-paying jobs, more affordable and reliable energy, and strengthened national security-is only expected to continue.

 

 

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