Mission Creeps
The latest assault on US shale.
“Back off or the lizard gets it!” – Ryan Stiles
On June 20th, the Energy Institute released its iconic Statistical Review of World Energy, an essential resource for macroeconomic analysts. Originally published by the oil giant BP in 1952, the annual document contains scores of useful tables with country-level data on all things energy. It is widely considered the go-to database for trusted statistics on this indispensable sector of the economy.
In perusing the 2024 edition, the magnitude of the US shale revolution is impossible to miss. Since 2010, the US has grown its production of oil and gas to three times what Saudi Arabia typically produces each year. It now satisfies more than 20% of the world’s oil needs and 25% of its natural gas consumption.
Although technology and geology have both played enabling roles in delivering this bounty of life-nourishing energy, the shale miracle would have been impossible were it not for two quirks of US property law. First, it is not uncommon for landowners to hold rights to the minerals beneath the surface of their land, whereas in most other countries the state keeps title to such resources. Second, the US Constitution, envisioning a loose confederation of states, limited the role of the federal government in regulating commerce to activities that cross state lines or international borders. As long as energy projects are confined within a single state, local governments are meant to hold sway over which projects get approved. This explains why Texas is a global energy powerhouse and California is a flaccid energy vassal, despite the similar nature of their oil and gas resources.
The framers of the US Constitution would be appalled by the size and claimed authority of the federal bureaucracy as it exists today. In 1900, federal spending as a percentage of gross domestic product (GDP) was just 2.7%. Today, it exceeds 20%. The Commerce Clause has been stretched to the point of unrecognizability, and the administrative apparatus has chosen to interpret bills like the Clean Air Act and Clean Water Act as broadly as possible, usurping regulatory authority from the states with impunity.
Among the favorite tools of environmentalists in their war on industry is the Endangered Species Act (ESA), a bill that is routinely used by the US Fish and Wildlife Service (FWS) to commandeer authority from local governments and rights from private landowners in the name of saving arcane forms of wildlife. Consider the plight of the blind and toothless widemouth blindcat, a rare catfish found exclusively in the underground waters of the Edwards Aquifer in Texas. In August of 2023, the FWS proposed that it be listed as endangered under the ESA, triggering outrage from US Senator Ted Cruz:
“This administration has weaponized its political agenda by sending bureaucrats on scouting missions to find obscure species that are not on the endangered species list. Their goal is to regulate private lands and strip landowners of their ability to control their own property. Now, they have proposed an ESA rule that protects two species of fish while threatening the drinking water supply of 1.7 million people living in San Antonio. This rule would shut down two major pumps that feed and refill the primary underground water storage facility. The lack of fundamental research to support this unfounded regulation is astonishing. The Biden administration should stop imposing oppressive regulations that elevate two obscure species of catfish over the needs of millions of working families.”
Last month, the FWS made perhaps its boldest gambit yet, raising the ire of the US oil and gas industry. In a move that threatens growth in the most prolific of the US shales, the FWS added an obscure reptile to the endangered list, overriding decades of collaborative conservation efforts between the industry and the States of Texas and New Mexico. In other words, get ready for an avalanche of headlines about the lowly Permian dunes sagebrush lizard.