By Joseph R. Mason
Last week Congress passed legislation lifting the 1970s-era ban on crude oil exports. While it is great that Congress ended this outdated policy, there is more work to do to realize America's full energy potential.
Under current policies, the government continues to keep federal lands off limits to energy production. Earlier this year, the administration proposed a wilderness plan for Arctic National Wildlife Refuge to starve the Alaska pipeline, while others want to deny Americans their energy resources under all federal lands and waters.
A different path exists: Letting Americans go to work bringing up the trillions of dollars of economic benefits, billions in revenue, and millions of jobs that lie underneath our feet.
America is blessed with abundant supplies of natural gas, oil, and coal - hundreds of years worth at current consumption levels. Yet some activists say we need to keep these resources in the ground. And that is exactly what current government policy does. More than 95 percent of federally owned lands and waters have not been leased for responsible energy development.
A new study I conducted on behalf of the Institute for Energy Research assessed the economic impact of immediately opening these federal lands and waters. The study, an update to a 2013 report, found that unlocking energy production on federal lands would unleash enormous economic growth for decades to come.
Over the next seven years, expanding energy production on federal lands would increase U.S. gross domestic product by $127 billion annually, create 552,000 jobs annually, and generate $34 billion annually in federal and state tax revenues.
The long-term benefits are even larger. Infrastructure costs would limit growth in the short term. But once those capital costs are paid, growth would accelerate, driving an economic stimulus that wouldn't require massive government subsidies and handouts.
The U.S. economy added about 8.7 million net jobs since January 2009, when President Obama took office. In the long-term, opening up federal lands would add an additional 2.7 millions jobs per year, equivalent to adding 19 million jobs over a similar period - all by simply allowing innovators to safely develop America's natural resources.
Job creation would extend far beyond the oil patch. Many of the jobs created would be in other high-wage, high-skill fields such as health care and education. Since energy is a key driver of economic growth, the benefits of producing more affordable energy ripple throughout the economy. In fact, the cumulative economic impact would exceed $20.7 trillion over 37 years, which is larger than the entire U.S. economy.
In addition to jobs and growth, tapping our domestic energy resources would generate more tax revenues. My study found that opening federal lands would generate $3.9 trillion in federal revenues and $1.9 trillion in state and local revenues over the next 37 years. Those revenues could be spent building schools and hospitals, repairing our nation's roads and bridges, or even paying down the national debt.
The benefits of unleashing energy development on federal land could be realized if the federal government simply got out of the way and stopped denying Americans their own energy resources. Doing so would make the United States more wealthy, more prosperous, more secure, and more prepared to face the future. It's time we get on with it.
Joseph R. Mason is the endowed chair of banking at the Ourso School of Business at Louisiana State University and a senior fellow at the Wharton School of the University of Pennsylvania.