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U.S. Energy Is Hotspot In Trump’s Economy

Saturday, 20 July 2019 | 00:00

But this month, it became apparent that President Trump’s Interior and Energy departments are underpinning this record economic growth.

Earlier this month, in the East Room in the White House, Trump and energy leaders from his administration announced that his environmental policies, support of innovation and energy development have led the country to have the cleanest air and best access to clean water in the world.

To boot, they lauded a strong economy expected to continue on an upward trajectory.

Stephen Moore, one of the President’s economic advisers, and one of the leading architects of the 2017 Trump tax law, told Forbes that what President Trump has proved is that “energy development is highly compatible with cleaner air and cleaner water.”

Moore, who authored Fueling Freedom: Exposing the Mad War on Energy, said President Trump has captured the elusive—creating policies that protect the environment and protect natural resources, encourage energy development but also drive economic growth— by using symbiotic policies that do not exclude fossil fuels from the energy mix.

Interior Secretary David Bernhardt said 835 million barrels of oil were produced in 2018 on federal public lands, which are managed by the Interior Department, which include the sea floor of the Outer Continental Shelf. One out of every five acres of land is designated as federal public land.

In fiscal 2018, Interior held 28 onshore oil and gas lease sales, which covered about 1.3 million acres and generated $1.1 billion in revenue, a new record.

Under the Trump administration, energy and mineral production activities on federal lands generated $9.1 billion dollars, supporting federal, state and local governments.

In remarks this month at the White House event, Energy Secretary Rick Perry said this is “a story that often doesn’t get told in a proper way, a story about what this administration is doing to clean up the environment,” a story about “technological breakthroughs” that will help the U.S. use energy “more cleanly, more efficiently.”

Perry told Trump, “We’re seeing—on your watch—America become the number one producer of oil and gas in the world. We’re seeing emissions being reduced around the world.”

How did this happen?

The fulcrum of Trump administration energy policies has been removing redundant regulations and streamlining the permitting process for energy development, recreation and conservation activities.

The administration’s efficiencies have put billions of dollars back into the federal Treasury that some argue was left on the table during the Obama administration.

Nick Loris, deputy director for the Roe Institute for Economic Policy Studies and Herbert and Joyce Morgan Research Fellow at the Institute for Economic Freedom at The Heritage Foundation said a big part President’s Trump success is “stepping out of the way,” getting the government out of the energy market, and removing redundant regulations. This gives businesses certainty and a clear path to energy production.

It looks like it’s worked.

In the first year of Trump’s presidency, Interior generated $7.1 billion in lease sales and royalties for energy development. In 2018, Interior generated $9.1 billion.

This month, officials in the Interior Department told Forbes they expect to make more in royalties in 2019 than the Department’s entire budget allocation—about $12 billion annually.

And as promised, Interior has cut the time it takes to permit oil and gas projects on federal lands by almost 100 days, about half the time it took before 2018.

Through these efforts, Interior has generated but also leveraged billions of dollars for recreation and conservation projects.

For example, Interior’s Fish and Wildlife Service invested $2.1 million in restoration under its Coastal Program which leveraged $85 million in partner investments and on-the-ground value.

By way of comparison, former President George W. Bush’s Interior Department had generated $24 billion for the federal Treasury from lease sales on federal lands in 2008 when he left office. When former President Barack Obama left office, his Interior Department had generated $5 billion.

“No two policy areas have differentiated the Obama and Trump philosophies more than energy and the environment.

Obama was viscerally anti-fossil fuels and nearly all his regulatory and executive order dictates were designed to kill fossil fuel development,” Moore said. “Trump’s agenda has been all in on American energy—of all types, including coal, nuclear and natural gas.”

GDP and Jobs

Gross domestic product (GDP) and job growth have been barometers of the Trump administration’s economic success, but energy has boosted those indicators.

GDP grew from 2.2% in the fourth quarter of 2018 to 3.1% in the first quarter of 2019.

How much of that is driven by energy is significant, though it’s not an exact science. Some industries are indirectly affected by energy and can increase GDP when energy production and development is strong.

According to the Commerce Department’s Bureau of Economic Analysis (BEA), about $321 billion of U.S. GDP was generated by mining operations. About $319 billion came from the utility sector. But $2.3 trillion came from the manufacturing sector and about $1.3 trillion—nearly 8% of GDP—came from the oil and gas sector.

BEA plans to release its first estimate of GDP for the second quarter July 26.

As GDP grows, so does the share of energy jobs.

The Labor Department’s Bureau of Labor Statistics (BLS) said the US economy added 224,000 jobs in June 2019. How many of those are directly and indirectly related to energy is opaque, though most stakeholders say it’s significant.

According to 2015 data from consulting giant PwC, the oil and natural gas industry alone supports 10.3 million jobs in the U.S. economy.

Perhaps ironically, a 2019 report, The U.S. Energy & Employment Report, produced by former Obama Energy Secretary Ernie Moniz’s clean energy nonprofit Energy Futures Initiative, shows jobs in the energy and energy efficiency sectors in 2018 grew by 2.3% from the previous year and represented nearly 7% of all new U.S. jobs. The sectors employed about 6.7 million Americans in 2018 out of a workforce of about 147 million.

Glass Half Empty

All of the energy growth driving the economy has skeptical environmental groups coming out in droves.

David Foster, a distinguished associate at Energy Futures Initiative, said that in 2018, some parts of the energy sector lost jobs. Americans in coal-fired generation lost almost 8,000 jobs, he said.

“This is clearly a result of the economics of natural gas and some renewables displacing older and inefficient coal-fired plants. Nothing the [Trump] administration has said can change that reality,” Foster, said referring to President Trump’s promise to bring back coal jobs lost during the Obama administration.

“At the same time solar jobs also declined by 8,000 jobs,” Foster said. “A portion of this decline came in manufacturing, demonstrating that the solar tariffs levied by the [Trump] administration did not return solar manufacturing jobs to the U.S. [and] an oversupply of solar panels in China led to a decline in prices that offset most of the tariffs.”

And just after the White House event this month, environmental groups cited a short-term rise in U.S. emissions as a barometer for President Trump’s so-called failure to protect the environment.

According to the Energy Information Administration’s July 2019 Short-Term Energy Outlook, carbon emissions rose 2.7% in 2018 because of weather and lower energy prices that drove consumption, and economic growth of 3% which drove overall energy demand.

However, EIA expects carbon emissions to decrease by 2.2% in 2019 and decrease further by 0.7% in 2020.

Because of natural gas, “the United States’ carbon dioxide emissions have trended downwards even as America’s energy use—and its GDP—have increased,” said Scott Parker, American Petroleum Institute’s Rapid Response and Content Manager. “The administration’s efforts to help boost exports of U.S natural gas is enabling other countries to replicate America’s model of environmental leadership by incorporating U.S. natural gas in their efforts to reduce carbon dioxide emissions.”

In a September 2018 report, EIA said an increased use of natural gas was responsible for more carbon emissions reductions in electricity generation than renewables.

Environmental Protection Agency Administrator, Andrew Wheeler, said under the Trump administration all criteria air pollutants continue to decline, from particulate matter to ground-level ozone. Lead and sulfur dioxide pollution has dropped by double digits.

Wheeler said 93% of community water systems meet all health-based standards, all the time thanks in large part to EPA’s partnership with state and local communities. Since President Trump took office, EPA has approved eight Water Innovation Finance and Infrastructure Act WIFIA loans totaling nearly $2 billion to help finance more than $4 billion in water infrastructure projects which have created about 6,000 jobs.

“As the president mentioned, economic growth and environmental protection go hand in hand,” Loris at the Heritage Foundation said. “If you are more economically prosperous and if you are an economically free country, you are going to have the means and resources to take care of your environment.”

“When you have new investments, you’re replacing old inefficient technology with efficient technologies that are better for the environment as well as the economy,” Loris said.
Source: Forbes

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