Newt Gingrich’s Declaration of Energy Independence – Beyond Peak Oil

Newt Gingrich has just released a half-hour lecture on US energy policy.

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To say, the ex-speaker is bullish on US domestic energy prospects is an understatement. He sets four objectives: (i) zero dependence on imported energy from potentially hostile states (Saudi Arabia, Iraq, Iran, Venezuela, etc); (ii) over a million additional high-paid jobs in the energy sector; (iii) a strengthened dollar due to a reduction of energy imports and increase in exports; (iv) gas at $2.50 per gallon.

Newt’s vision is based on massive exploitation of what he believes are more or less unlimited unconventional oil and gas reserves. The US could have three times as much oil as Saudi Arabia, he argues, and gas for 100 years or more. The geopolitical consequences of this bounty will be striking. As President, he would have the Saudis firmly in his sights:

I want to get to a point where we produce so much oil in the United States that no American president will ever again bow to a Saudi King. I thought, frankly, it’s time that we tell the Saudis the truth: We know that they are the largest funders of schools called madrassas, which teach hate. We know that they spend several billion dollars a year exporting a very, very extreme version called Wahhabism, and we know that they are not straight with us.

And up until now, our presidents have been too cautious to say, “Oh gee, I don’t want to offend the Saudis. I don’t want them to do something with their oil supply.”

Well, we have an opportunity now to turn that around. We have an opportunity to build up the American oil supply, the American natural gas supply, so we can then tell the Saudis the truth, so we can deal with them from a position of strength, so we can no longer worry about the Persian Gulf.

And at that point, if, in fact, the Iranians want to do something with the Straits of Hormuz, maybe the Chinese have a problem or the Indians have a problem or the Europeans have a problem. But I am not sure at that point that the Americans will have a problem if we become once again what we were in World War II, the leading producer of oil in the world.

As is often the case, Newt has tapped deep into the Zeitgeist by choosing today to go large on energy. Talk to American policy makers and they have become incredibly bullish about the prospects for the domestic sector (although few, of course, rising to Gingrichian heights of enthusiasm).

Citigroup recently proclaimed the end of Peak Oil, triggering a debate on whether shale gas and tight oil prospects are fundamental game changers or whether they will have a more marginal – although still significant – impact (see Chris Nelder for example). No-one credible I have talked to would disagree that a shift of some kind is afoot.

Newt is also right to see potential geopolitical advantages for the US. American energy demand is fairly stable and its domestic endowment is growing. In contrast, China and India face decades of rapidly increasing consumption of all natural resources. They also still have lots and lots of resource-hungry cities to build. Their transition is going to be much more tricky to handle.

The US also has leadership in key technologies (fracking, enhanced oil recovery, solar, even nuclear) that are increasingly valuable as energy demand grows. And it’s well-placed on food and land (although water is a big problem for some parts of the country).

Characteristically, of course, Gingrich overplays his hand (that’s his shtick). America sitting back while the Gulf implodes? Good luck with that. And market prices for oil – less so for gas – are set globally. Demand overseas will continue to drive the price the American consumer pays for gasoline at home: ‘oil isolationism’ is, and will remain, a fantasy.

And, of course, climate change does not get a mention in Gingrich’s current world view (although it used to), even though new fossil fuel discoveries are putting huge amounts of new carbon in play. That is not a problem that can be ignored ad infinitum.

I’m expecting Newt’s energy fervour to be much mocked, but don’t bet against him getting some momentum too. And the mood could spread. We might see quite a lot more bullish talk on energy in the American presidential debate.

Update: Just reading the transcript, one misses some of the glory of Newt’s delivery, which is Pinteresque at times: “Under President Obama, because he is so anti‑American [pause] energy, we have actually had a 40 percent reduction in development of oil offshore.”

Update II: The Onion weighs in:

As Newt Gingrich continues to cede ground to Rick Santorum, the former House speaker’s campaign team has responded by advising him to stay focused on the belligerent, mean-spirited message that has long been the hallmark of his presidential run, sources confirmed Monday.

“Newt’s rhetoric can become abstract and idiosyncratic at times, and we have to gently remind him that he just needs to be himself, to be the Newt people are familiar with—the Newt devoid of any discernible scruple beyond his own insatiable instinct for self-promotion,” campaign director Michael Krull said Friday, explaining that whatever lies at Gingrich’s cold, depraved core is what will make or break him with voters. “Every time he veers off course and talks passionately about about outer space or how the United States has to stop spending beyond its means, I tell him, ‘Look, your greatest asset is being a remorseless asshole.”

Newt Gingrich – climate change hero

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I can see why the world is warming to Newt. He talks a lot of sense on climate change.

My message is that the evidence is sufficient that we should move towards the most effective possible steps to reduce carbon loading in the atmosphere… and do it urgently.

Let me explain why this is a very challenging thing to do if you’re a Conservative. For most of the past thirty years, the environment has been a powerful emotional tool for bigger government and higher taxes. Therefore if you’re a Conservative, the minute you start hearing these arguments, you know what’s coming next. Just bigger government and higher taxes. So even though it might be the right thing to do, you end up fighting it because you don’t want the bigger government and the higher taxes. And so you end up in these cycles…

I think there has to be a green Conservatism. There has to be a willingness to stand up and say, “here’s the right way to solve these [problems] as seen through our value system. And now have a dialogue about what’s the most effective way to solve it, rather than get into a fight about whether to solve it. When I was speaker, on a whole range of biodiversity issues, I intervened again and again on the side of the environment. I really do believe [in the environment].

I would be delighted to see open ended hearings – not in time, but in terms of the topic – that started and said: “If we’re serious about a dramatic global reduction in carbon loading over the next twenty years – starting immediately – what are the different models that might work? Are there incentive based, market-oriented models that might work as well or faster? And is there a chance that they would produce the technology that would make it easier  for India and China to decide you can have green prosperity?”

Because if you can develop green prosperity, you change the entire trajectory for the planet, not just for the US… I would love to see hearings that didn’t start with a fight over cap and trade… which I don’t think is the way to start. The way to start is to ask what the optimum choices we can make strategically to minimize carbon loading in the next twenty years.

I believe we can bring a science, technology, and entrepreneurship/incentive-based model that would at least be worth being considered seriously by the House and Senate.

Two minor caveats. First, I don’t think  Gingrich ever developed his idea for an incentive-based model that wasn’t cap and trade. And, of course, this is from back in 2007. I hear the ex-Speaker’s position has evolved been more intelligently designed since then. Here’s the 2011 version:

Remember, in the mid-1970’s there was a cover of Newsweek and Time that says we’re in the age of a brand new glacial period and they had a cover of the Earth covered in ice. This is the 1970’s. Now many of those scientists are still alive and they were absolutely convinced. I mean, if Al Gore were able to in the 1970’s we would build huge furnaces to warm the planet against this inevitable coming Ice Age.

I’m not disputing or discrediting the National Academy of Sciences, I’m saying a topic large enough to change the behavior of the entire human race is a topic that is more than science and deserves public hearings with very tough minded public questions and we’ve had almost none of that on either side.

The ‘more than science’ hearings should be fun! Perhaps Newt will explain what happened to evidence that was sufficient to demand urgent action just four years ago…