Contrary to what is usually reported, despite the attention given “renewable energy,” traditional sources of power offer more benefits. “We need to look at energy in economic terms,” economics professor Timothy J. Considine said at the American Enterprise Institute (AEI) last Friday. “What can generate the most value?”
“States that are currently experiencing drilling for unconventional sources of oil—Pennsylvania, West Virginia, Ohio, North Dakota, Louisiana, Texas—all of these states have seen rising tax revenues and lower unemployment.” Considine teaches at the University of Wyoming.
At the other end of the spectrum is California, a widely acknowledged catastrophe in so many ways. “In 1970, California produced 62 percent of its own energy,” Considine noted. “In 2009, California imported 67 percent of its energy.”
This trend is likely to continue, whether the Golden State can afford it or not. “The recently passed California Renewable Energy Resources Act sets out the most ambitious renewable portfolio standard (RPS) in the country,” Considine noted in a paper he co-authored with another professor from the University of Wyoming. “The law requires 33% of electricity retail sales to be served by renewable energy resources by 2020. This study considers this scenario and an expansion to a 40% renewable standard by 2035.”
Considine’s co-author on that paper was Edward Manderson, of the School of Energy Resources at the University of Wyoming. “Outside Alaska, California has the largest untapped potential for additional oil and gas production in the United States,” Considine and Manderson noted. “Offshore California contains more than 10 billion barrels of oil and nearly 12 trillion cubic feet of natural gas.”
“Onshore, the Monterey Shale may contain more than 15 billion barrels of oil. At current market prices, these reserves are worth more than $2 trillion.”
Considine also serves as Director of the Center for Energy, Economics and Public Policy at the University of Wyoming. “Oil and gas is already profitable,” he said.
He added that drilling off shore in places like Santa Barbara would be in the best interest of American investment. According to Considine, there are some 1.5 billion barrels of shore oil in Santa Barbara alone.
“With a case study of expanding existing oil and natural gas development in the Santa Barbara, this study finds that the economic and fiscal impacts of developing these resources are uniformly positive with the creation of between 22,000 and almost 25,000 jobs annually, between $82 and $84 billion in gross state product, and over $23 billion in state tax revenues over the next 25 years,” Considine and Manderson wrote.
Considine said at AEI that although there are gains made in renewable energy, they are a “drag on the economy,” when they are paid for. “The claim that renewable energy produces jobs, it’s true. But many of these jobs are temporary.”
Jocelyn Grecko is an intern at the American Journalism Center, a training program run by Accuracy in Media and Accuracy in Academia. Jocelyn has spent the past four years in the nation’s capital as a Media Studies undergraduate student at The Catholic University of America. She will graduate in May 2012.
If you would like to comment on this article, e-mail mal.kline@academia.org
