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Silverstein: Natural gas will give the industry the ‘oomph’ it needs

Renewable energy creates jobs and helps minimize air pollutants, but the growth of America’s energy sector is hinged on good ol’ oil and gas, according to Forbes columnist Ken Silverstein.

“If the United States is to see the 3.6 percent growth in annual output, the oomph will come from the increase in oil and natural gas production,” Silverstein writes. “Ironic, given that this phenomenon has occurred on President Obama’s watch, when the development of green energy has been touted as the great economic hope.”

Silverstein cited a recent joint study by the Harvard Business School and the Boston Consulting Group that points to low resources costs, particularly those of natural gas, as American energy’s catalyst for growth.

“The U.S. now has a global energy advantage, with wholesale natural-gas prices averaging about one-third of those in most other industrial countries,” the study said, adding that shale oil and gas have contributed $430 billion to the GDP in 2014 and can be linked to more than 2 million American jobs.

Following the lead of trends in natural gas production, which doubled in the past decade, the US Energy Information Administration said American’s natural gas consumption saw a 1.7 percent increase since 2013. Cheaper natural gas and dwindling coal usage will continue to boost natural gas utilization in the power industry and cut manufacturing costs by 2 percent, the Boston Consulting Group alleges in a separate study.

Despite manageable obstacles the EPA notes, such as capturing methane and safeguarding groundwater supplies, Silverstein concludes that natural gas, which currently makes up about 30 percent of American energy, has the potential to by as much as 50 percent in the next 20 years.

“The U.S. needs to achieve a ‘rational middle’ ground to capitalize on this historic property,” Silverstein quotes the Harvard/Boston study. “The stakes are too high to fail. Long-entrenched opposition and antagonism will not dissipate overnight. But we must get started.”

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