An Extra $59 Billion Could Solve a Lot of Problems

“BP just discovered a billion barrels of oil in the Gulf of Mexico.” It was just another CNBC headline on January 8, and yet it highlighted a bigger trend: the surge in U.S. energy production.

And in a way, it also highlighted a big counter-trend: the green left’s desire to take it all away, in the name of fighting climate change.

So let’s take a moment to drill down, pun intended, on that new discovery. At current prices, that new oil, in the waters south of New Orleans, is worth about $59 billion. For purposes of comparison, the GDP of the entire state of Louisiana in 2017 was $246 billion. Which is to say, $59 billion is an appreciable bump.

In fact, as CNBC noted, the new discovery will inspire $1.3 billion in investment to actually get the oil out. And that’s good news for all the workers who will get jobs and overtime out of this additional economic activity; according to Zip Recruiter, energy jobs in the Gulf pay an average of $80,201 a year. And so there’s good news, too, for families, neighbors, storekeepers, and stakeholders.

And oh yes, it’s good news, as well, for the United States, since energy security is a big part of national security. As any Baby Boomer remembers, all through the 60s, 70s, and 80s, we were told by the experts that the U.S. faced an “energy crisis.” Thus we needed to take dramatic steps to deal with this supposed shortfall—everything from cutting back on consumption to invading other countries to seize their oil.

Yet in the past two decades, all this “expertise” has gone to the trash heap, because, thanks to strong science and stronger entrepreneurship, we’ve enjoyed an energy miracle. This is in large part due to the new process of fracking; in 2018, the U.S., for the first time since World War Two, became a net energy exporter.

Moreover, there’s more happening with energy production than just fracking. To put it simply, there’s a lot more energy in the earth than the experts thought possible.

Part of this energy abundance is the simple working of the law of supply and demand. As every free-marketeer knows, if there’s a market for something, some entrepreneur will find a way produce more of it. And if that requires exploration everywhere, well, that’s exactly what’s happened; around the world, proven oil reserves have nearly tripled since 1981.

Indeed, some heterodox observers, such as the late Thomas Gold, argue that the earth is, in fact, making more energy, even now. That is, oil, gas, and coal aren’t “fossil fuels” at all, in the sense that such fuels are supposed to be the decayed remains of dinosaurs and other prehistoric organisms. Instead, Gold argued, the internal heat of the earth is, as it were, constantly cooking up more oil. By this reckoning, so long as the core of the earth is hot, we’ll never run out of carbon-based fuel.

This theory of the non-biological origins—abiogenesis–of oil goes back to the 19th century. And yet even today, among geologists, it’s still a decidedly minority viewpoint. Still, every time we discover additional carbon-based fuel reserves, that’s an indicator that we might be dealing with a lot more than just the remains of the Jurassic Period. (As an aside, we might observe that the debate over the origins of oil puts useful perspective on the question of whether or not there is truly such a thing as “settled science.”)

Whatever the source, the reality is that we’re all standing atop virtually incomprehensible quantities of untapped energy abundance. In 2014, Breitbart News noted that the value of oil and gas under federal lands and waters amounted to $128 trillion. That $128 trillion, we might add, is six times the GDP of the U.S. Once again, that’s just federal lands and waters—a fraction of this country’s total territory.

These energy realities could be the makings of a happy story of energy abundance, leading to both economic and national security for every American. After all, with that much money, we could provide good education, protect retirees, build infrastructure, improve our defenses, cut taxes—and still have trillions left over.

However, as we know, there are some who don’t want any of this to happen. In the name of fighting climate change, some green environmentalists seek to, in the words of top-dog enviro Bill McKibben, “leave it in the ground.” Or, in the case of that new $59 billion worth of oil in the Gulf of Mexico, “leave it under the water.”

Alexandria Ocasio-Cortez and the Green New Deal: Conquest? Or Compromise?

The argument over climate change has been raging for decades, and yet only in the past few years has it really gained momentum. The 2016 Democratic platform was ambitious; it called for getting 50 percent of our electricity from “clean” sources within a decade, and for reducing carbon dioxide emissions by 80 percent by 2050.

Since then, the greens and the Democrats have upped the ante: In 2017, some Congressional Democrats introduced legislation eliminating carbon fuel emissions by 2035. More recently, Rep. Alexandria Ocasio-Cortez has rallied Democrats to the target of ending carbon emissions by 2030.

For perspective, we might interject that today, carbon fuels—oil, gas, and coal—account for 77.6 percent of U.S. energy consumption. And that’s all supposed to go to zero in 11 years? Hmmm.

We can add that today, renewable fuels account for less than 13 percent of our energy consumption. And most of our renewable energy, by the way, is hydropower, and the greens are increasingly hostile to dams as well. And so if we look at the two forms of energy that the greens truly approve of, namely, solar and wind, well, those two sources account for only about three percent of U.S. energy.

So can we really expect to ramp up solar and wind, from three percent of our energy production, to 100 percent of what we need, and will need, as the population grows? In a little more than a decade? We all know the answer to that.

In the short run, the green goal is moot because Republicans control the White House and the Senate; there are, to be sure, differing opinions on climate in Republican ranks, but there’s no appetite for anything like what the greens have in mind.

Of course, all that could change after 2020, if the Democrats do well in the next election. If so, then the Democrats’ green agenda, which is coming to be known as the Green New Deal, has a chance of becoming law. (This author has already written about the prospect of a Green New Deal, here, and here.)

So now we can see the makings of the next epic political fight: that is, the zeal of the greens vs. the determination of carbon-energy producers. In the U.S. today, about a dozen states are heavily dependent on carbon-energy production for their wellbeing; these states account for most of the 1.1 million employees in the energy sector.

Are these states, and their elected officials, ever going to submit meekly to some green dictate that says leave it in the ground? That doesn’t seem likely. And will lawmakers from, say, Louisiana—seeking to defend the new $59 billion worth of newly discovered oil, on top of the previously discovered $2.61 trillion, still waiting to be tapped—find a way to make constructive political alliances with those from states that don’t produce energy, but merely consume it? That does seem likely.

Indeed, it’s quickly apparent: No matter what happens in the 2020 elections, the U.S. is not going to shut itself down for the sake of climate change. And neither, of course, is any other country in the world.

So it’s entirely likely that we’ll be in a political standoff: if not after the 2020 elections, then sometime soon enough. On the one side will the greens, and on the other side will be the “carbons.” Who will win in the end? There’s no way to know, of course, but the greens’ losing fight with France’s yellow jackets should give them pause.

Of course, not everything has to be a fight. This author has argued for years that the overlooked middle ground in the climate change debate is carbon capture: that is, sequestering atmospheric carbon dioxide, preferably as a solid, so that it can’t contribute to the greenhouse effect. One would bet that if the Green New Deal were ever to really get going, carbon capture would loom large, offering a win-win for both sides. That is, we put less CO2 in the atmosphere—or even start removing it—but we still get the energy benefit of our natural resources.

The Secret Split in the Green New Deal

It’s clear that the Green New Deal has more impetus than just climate change. That is, Ocasio-Cortez and her allies see a Green New Deal as being about more than climate change—it’s about changing America.

To be sure, some critics see this possible change in America as Venezuela-ification. And yet it’s worth noting that key Green New Dealers see the change in a much different frame of reference. Here, for example, is Saikat Chakrabarti, top adviser to Ocasio-Cortez, tweeting on January 13, linking the Green New Deal to U.S. economic mobilization during World War Two:

No one is arguing against increasing productive capacity to go alongside increasing public investment. This is literally what we did to mobilize for World War 2, and @AOC has referenced that multiple times when talking about the economics of a Green New Deal.

No one is arguing against increasing productive capacity to go alongside increasing public investment. This is literally what we did to mobilize for World War 2, and @AOC has referenced that multiple times when talking about the economics of a Green New Deal. — Saikat Chakrabarti (@saikatc) January 14, 2019

In the words above, we see muscular words such as “increasing productive capacity” and “mobilize,” which aren’t exactly the same as hugging trees and worshiping nature. In other words, the emphasis in Chakrabarti’s tweet is economic, not environmental.

We might further observe that World War Two was many things—beyond, of course, the necessary and righteous defeat of fascism. World War Two was also about growing the economy; during the four years of fighting, America’s GDP rose 48 percent. Of course, most of that growth went to war production, and yet even so, personal consumption rose 20 percent, as unemployment fell to one percent. Not bad.

But one thing we can say for sure about World War Two: It wasn’t green. That is, all those factories, all those oil pipelines, all that technology—it was the opposite of the Al Gore worldview. (Or should we say, the world that Al Gore wants for us.)

Now, of course, in the future, since we know so much more than we did then, we can make growth clean—that’s the point about carbon capture, and other new technologies. And yet at the same time, clean growth is still growth, and that means more. Yet are the environmental greens, as opposed to the Green New Dealers, really on board with that? We’ll have to wait and see if that split is real, and if it can be bridged.

So, down the road somewhere, if Green New Dealers still say they want to create 10 million new jobs, maybe the rest of us should say, “That’s great! Now, how’re you going to pay for them?”

And at that point, that $59 billion in new oil money from the waters off Louisiana might come in handy. Yes, with new technology, it can be made as clean, but energy is energy, and so if the goal is to create more jobs and more wealth for people, then, for sure, we need to think hard about using all of it. That is, we must do the opposite of “leave it in the ground.” After all, we have a lot of children to educate, streets to protect, and elderly to take care of.

This need to use all our energy, including carbon fuels, becomes all the more apparent if it proves to be true that the earth is literally making more oil, coal, and gas—even as you read these words.

Indeed, with a bit of whimsy, one might even ask: If Mother Nature is giving us a gift, should we not feel an obligation to accept it? Surely we wouldn’t want to offend her by refusing such a gift. After all, as the classic TV commercial from the 70s, warned us, “It’s not nice to fool Mother Nature.”