The turmoil in the Mideast and the resulting rise in world crude oil prices give credence to the argument that we need to become less dependent on oil from foreign nations. However, we are afraid President Obama will use this unfortunate series of events as evidence that we must end our dependency on fossil fuels, and will attempt to drive us headlong into the magical fantasy of “alternative and renewable energy.”
The appeal for the replacement of fossil fuels, namely oil and natural gas but coal as well, makes for a great sound bite, but to call for fossil fuel substitution in the beginning age of alternative fuel development is worse than premature. It is a cruel hoax played upon the American public. Presently, there are simply no viable alternatives, merely supplements. More than 85 percent of the world's ground transportation fuel and 100 percent of air transportation fuel comes from oil. That is not going to change any time soon.
In these tumultuous times, we need our own oil and gas more than ever. Responsible policymakers should be pursuing acceleration of development of our own fossil fuel resources. Yet the administration wants to take away the tax provisions that provide the capital needed to generate these resources. It's a nearsighted vision, especially when independent producers drill 93 percent of domestic wells and historically invest all their cash in new drilling. Then they borrow more.
Thousands of American jobs they create will be lost if 30 to 40 percent of the capital for drilling is eliminated through the loss of tax provisions. In an ironic twist, now that we need to increase U.S. production, certain members of Congress have launched a crusade against the technological advances in hydraulic fracturing that make possible the safe production of shale oil and gas resources.
We have proven, through decades of development and production, that we can harvest our vast domestic oil and natural gas shale reserves in an environmentally safe manner. Because of technological advances in hydraulic fracturing and horizontal drilling in our shale resource plays, we currently produce more oil each year than the previous year. This trend has continued for the past five years, and our natural gas reserves are now measured in centuries.
When American companies find and produce American energy, we all win. All Americans are together on wanting more and better jobs and in keeping energy prices as low as possible. We must encourage our elected officials to turn a deaf ear to those who would raise the cost of energy with policies discouraging the production of our own oil and gas and making us more dependent on sometimes-unstable foreign sources of energy.
The virtual renaissance in American onshore oil and gas exploration, if allowed to continue, will meet the energy needs of America for centuries to come.
Hamm is CEO of Continental Resources Inc. and chairman of the Domestic Energy Producers Alliance.