Tuesday, August 20, 2013

Editorial Board of USA Today Catches Up with Meade

Looks as if the editorial board of the USA Today is catching up with Professor Meade's analysis of the US energy boom.  The article excerpted and linked below repeats much of what Professor Meade has had to say about energy policy and the benefits to the US of new discoveries / advances in the oil and gas sector.  The editorial does comment on Mexico's decision to open its long nationalized and inefficient oil and gas operations to private investment.  That should result in increased efficiency and production in Mexico, which will only enhance North America's position as a significant new player on the world energy stage.

It would be extraordinarily beneficial to the Mexican economy - and would relieve some immigration related pressures in the US - if the oil and gas industry in Mexico experiences an explosion in production similar to the oil and gas driven booms in North Dakota, Pennsylvania and South Texas. 

The global energy landscape is changing at a stunning pace. North America is close to energy independence, which once seemed unattainable. Better yet, the U.S., long dependent on supplies from potentially hostile nations, will attain self-sufficiency in 20 years, according to a study by BP.
There are many lessons from all this. The first, and most obvious, is never to assume that the status quo is a permanent state. If oil-rich countries in the Persian Gulf are not viewing these developments with alarm, they are delusional. And if manufacturers in Asia and elsewhere don't see how cheap energy will fuel industrial growth here, they should. After years of decline, it's already happening — another big surprise.
A second conclusion is that free enterprise has a way of solving problems that is beyond the capabilities of government. The surge in domestic oil and gas production — spurred on by such new techniques as hydraulic fracturing (or "fracking") did not come about as the result of government energy polices, but largely in spite of them. And Mexico's recent shift is an acknowledgment that public ownership of the oil industry does little but stifle growth and deny government much needed revenues.

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