Last month, President Barack Obama spoke to Republicans at our annual retreat and asked for our ideas on how to strengthen our ailing economy. I appreciate that offer to work constructively together to help put Americans back to work. Mr. President, because you asked, the following is one Republican's sincere suggestions on a vital part of reviving our economy. I believe that our nation's vast energy reserves are key to our economic recovery.
Low-cost energy has been a driving force behind America's productivity and wealth throughout our country's history. There's absolutely no question that today, developing those resources will help create jobs, grow our economy and free us from our overdependence on foreign sources of energy.
Unfortunately, the administration released a budget last week that anticipates a huge drop in revenue from new Outer Continental Shelf leases. The only way revenue would decline is if less of the OCS is offered for leasing for energy production. In fact, the administration anticipates that over the next five years lease revenues will drop below what they were estimated to be in fiscal 2009 -- when a Congressional moratorium was in place.
This means the Obama administration's current policies are more restrictive on offshore energy development than the previous moratorium!
I urge the president to seriously reconsider his proposals to restrict access to energy. We need an all-of-the-above energy policy that includes tapping both unconventional and conventional energy sources.
One of the most promising sources of new energy is natural gas from shale. Today, shale gas and other unconventional natural gas sources such as tight sands and coal bed methane provide more than 47 percent of the natural gas consumed in the U.S. annually. According to the Energy Information Administration, by 2030 these unconventional natural gas resources will provide 56 percent of the natural gas consumed by the United States.
All of this was made possible through development of the Barnett Shale in Texas in the 1980s and 1990s, where innovative drilling techniques, horizontal drilling, combined with the safe long-standing practice of hydraulic fracturing, demonstrated that this unconventional fuel could be economically produced on a large scale.
I believe for the United States to improve both its economic and national security, we will have to develop more of our own resources -- renewable resources such as wind, solar, hydropower, geothermal, biomass and nuclear -- but we must recognize that we will need to use our fossil fuels well into the future. Whether we like it or not, we and the rest of the world are highly dependent on these fuel sources, and they are fully integrated into our society. These are the energy resources that continue to fuel our nation's economy and the economy of the world. This is an undeniable fact.
Based on current law, the projections in the EIA outlook show that we will still be importing a tremendous amount of oil in 2030. An increase of 1 million barrels per day of domestic production would reduce our imports by a million barrels a day. In today's economy, that means adding nearly $13 billion per year to the American economy that we currently ship overseas to foreign governments. Opening up domestic reserves, including the OCS, would benefit our Treasury as well through significant royalty payments.
The EIA's 2010 Annual Energy Outlook analysis shows that imported liquefied natural gas will be at 1.5 trillion cubic feet in 2021. We have all learned that our dependence on foreign oil is dangerous to our security and economy. We should not replicate that with natural gas when we have such rich resources at home. Development of our shale gas resources, completion of the Alaskan natural gas pipeline and development of our OCS gas resources can protect us from becoming dependent on foreign natural gas.
Energy independence is especially crucial as we push to emerge from the current economic recession. Professor James Hamilton from the University of California, San Diego has written that "nine out of ten of the U.S. recessions since World War II were preceded by a spike up in oil prices."
Republicans have introduced the American Energy Act (H.R. 2846), which is an all-of-the-above solution that offers energy independence, good jobs and a cleaner environment for our nation. The American Energy Act promotes new, clean and reliable sources of energy. But it's only one of many energy solutions put forth by Republicans in Congress. After hearing Obama's State of the Union address, I hope he considers how opening up domestic resources, rather than restricting access to them, would accomplish his goal of restoring economic health to our country.