For those of us who live and work in Washington, too many conversations quickly turn to obsessing about politics and to hand-wringing over how dysfunctional things have gotten in recent decades. It’s easy to get pessimistic about what this dysfunction portends for our country. Big decisions aren’t being made. Our country deserves better leadership than it is getting, and that criticism applies to both parties at both ends of Pennsylvania Avenue, and to presidential administrations current and past. When we see leaders waiting until the last possible moment to act, then doing the absolute minimum to avoid catastrophe, it’s easy to become discouraged.
The next 120 days will be pivotal. With the across-the-board budget cuts from sequestration more likely to kick in than not on March 1, a government shutdown on March 27 entirely possible, a new budget due April 15, and another debt-ceiling deadline looming on May 19, we have a roller-coaster ride ahead of us—one that we can count on as being entirely unpleasant, if not terrifying.
Talks with many members of Congress and executive-branch policymakers reveal that they share many of the same frustrations as us noncombatants, although they quickly offer explanations and rationalizations or point fingers at the other party or chamber.
But it’s also important to identify and remember the good things going on in this country and to recognize that, despite the failures of our political process, things might just get a lot better.
Most Americans would be astonished to learn that North America could be energy independent by 2020, thanks to the technological advances in the exploration and production of natural gas and oil, along with progress in energy efficiency. Because of these advances, including hydraulic fracturing (fracking), we are quietly witnessing one of the most important transformational changes in our country’s history. The implications are significant for our national security, our balance of trade, the restoration of our economy, and the creation of jobs, in what is now being called the coming manufacturing renaissance.
A Jan. 29 report by the Wall Street economic and policy research firm International Strategy & Investment was certainly eye-opening for me. Culling through research provided by some of the leading energy experts in the world, the ISI report, “How the U.S. Energy Renaissance Is Changing the Global Investment Outlook,” gives the reader a whole new attitude toward our future.
The International Energy Agency now predicts that the U.S. will be the world’s largest natural-gas producer by 2015, surpassing current leader Russia. Statistics compiled by the U.S. Energy Information Administration and ISI’s integrated-oil analyst Doug Terreson indicate that the share of energy from domestic sources will rise from 79 percent of consumption today to 87 percent by 2020 and that the majority of the other 13 percent will come from Canada or Mexico.
The U.S. now has one of the lowest prices for natural gas in the world, averaging $3 per MBtu (1 cubic foot of natural gas is equal to 1,000 British thermal units of heat energy) compared with $15 in Japan, $13 in South Korea, and $11 in Germany. With 30 percent of electricity in the U.S. currently being generated by natural gas, cheap gasis bringing down the cost of electricity, and rates here are about 50 percent lower than in Europe.
Oil production in the United States hit a 20-year high in January, and the International Energy Agency is predicting that it should surpass Saudi Arabia, the leader, by 2019. Crude oil imported from OPEC has already dropped to below 50 percent of our imported oil, with the share from Canada and Mexico at almost 40 percent. By 2030, more than 80 percent of the oil imported in the U.S. will likely come from Canada and Mexico. Exxon Mobil predicted in December that North America will be a net exporter of liquefied propane by 2025, and this continent is already the largest propane producer in the world.
What this means is that the United States is poised to be far more competitive in manufacturing than we have been in a long time. Lower energy costs can offset much of the higher labor cost here, although advances in automation and productivity are bringing down our labor costs as well.
Our country is now just barely coming out of the longest and deepest economic downturn since the Great Depression. A painful deleveraging process—unwinding debt built up during the bubble years of the past two decades—takes time and must continue. Housing, which normally leads the country out of recessions, is only just emerging from its horrible plunge and is well positioned to help turbocharge our economy if public policy doesn’t get in the way.
There is a lot that is good and promising going on in this country. There is reason for hope that things will get better, notwithstanding the paralysis in Washington. Just think how much better things would get if Washington started functioning again.
This article appears in the February 5, 2013 edition of NJ Daily as Signs of Hope.