From my op-ed in today’s Investor’s Business Daily (which started in April 1984 and is now celebrating “30 years of innovation and growth”) titled “Earth Day: Hail Fossil Fuels, Energy of the Future“:
On Earth Day, according to various advocates, “events are held worldwide to increase awareness and appreciation of the Earth’s natural environment.” As we observe the event today, it might be a good time to appreciate the fact that Americans get most of their plentiful, affordable energy directly from the Earth’s “natural environment” in the form of fossil fuels (coal, natural gas, and petroleum). It’s largely those energy sources that fuel our vehicles and airplanes; heat, cool and light our homes and businesses; power our nation’s factories; and in the process significantly raise our standard of living. Shouldn’t that be part of “increasing our awareness and appreciation of Earth’s natural environment” — to celebrate Mother Earth’s bountiful natural resources in the form of abundant, low-cost fossil fuels?
From 1949 to 2040, fossil fuels have provided, and will continue to provide, the vast majority of our energy by far, according to President Obama’s Department of Energy. Last year, fossil fuels provided almost 84% of America’s energy consumption, nearly unchanged from the 85% fossil-fuel share in the early 1990s. Despite Obama’s dismissal of oil and other fossil fuels as “energy sources of the past,” his own DOE forecasts that they will still be the dominant energy source in 2040, providing more than 80% of our needs (see chart). They will continue to serve as the dominant energy source to power our vehicles, heat and light our homes, and fuel the U.S. economy.
Further, Obama’s energy policy has been primarily to force taxpayers to “invest” in “energy sources of the future” — renewables like solar and wind — instead of expanding production of oil, natural gas and coal. But again, DOE data tell a much different story. Even after billions of dollars in taxpayer subsidies for renewable energy, renewables last year provided only 7.8% of America’s energy, which was actually less than the 9.3% share that renewables provided in 1949 (see chart). That’s not a lot of progress for the politically popular, and very expensive, renewables. When it comes to solar and wind, those two energy sources provided less than 2.3% of America’s energy in 2013. Even in 2040, more than a quarter century from now, solar and wind together will account for only 3.9% of America’s energy, according to government forecasts, and all renewables together (including hydropower) will provide only 10.4% of our nation’s energy.
To further appreciate the Earth’s natural environment on Earth Day, we should celebrate the revolutionary technologies of hydraulic fracturing and horizontal drilling that have allowed us to access previously inaccessible, natural energy treasures trapped in tight shale rock miles below the Earth’s surface.
It’s an important point that those shale resources have been part of the Earth’s “natural environment” for many thousands of years but have become usable natural resources only in the last six years, because of the human resourcefulness that led to breakthroughs in drilling and extraction technologies.
As Thomas Sowell pointed out in his book, “Knowledge and Decisions”:
The cavemen had the same natural resources at their disposal as we have today, and the difference between their standard of living and ours is a difference between the knowledge they could bring to bear on those resources and the knowledge used today. Although we speak loosely of ‘production,’ man neither creates nor destroys matter, but only transforms it — and the knowledge of how to make these transformations is a key economic factor.
The full awareness and appreciation of Earth’s natural environment really makes sense only as a greater appreciation of the human resourcefulness and human ingenuity that have transformed natural resources like sand into computer chips, and oil and gas trapped in shale formations miles below the ground into usable energy. Mother Nature provides us with an almost infinite abundance of natural resources but without any “instruction manuals” that tell us how to process them into useable products that improve our lives and raise our standard of living.
On Earth Day, let’s not forget to celebrate and appreciate the human resources — knowledge, ingenuity, know-how, creativity, entrepreneurship, and imagination, i.e. the “instruction manuals” — that transform otherwise unusable resources like shale hydrocarbons into energy treasures that will power our economy for generations to come.