The Energy Security Leadership Council (ESLC), a project of Securing America’s Future Energy (SAFE), recently released a study entitled Economic Impact of the Energy Security Leadership Council’s National Strategy for Energy Security. The paper, a long-term macroeconomic analysis of policy proposals put forward by the ESLC last September, finds that the U.S. economy would benefit substantially over the long term from implementation of the ESLC policy package.
“In short, the study finds that the policy proposals we have put forward would result in dramatic benefits for the American economy,” ESLC Co-Chairman Frederick W. Smith, Chairman, President and CEO of FedEx Corporation, said in a luncheon speech at the National Press Club today. “We are confident that our nation can do this. What we need is the national will and the commitment to secure our own future.”
In September, the ESLC released A National Strategy for Energy Security, a comprehensive set of solutions to the very real threats posed by our nation’s dependence on oil. The National Strategy presents a bold vision: the transformation of our transportation sector from one dependent on petroleum to one largely powered by electricity. Because that is a long-term goal, the recommendations also detail the policy steps necessary to reach it while preserving our economic and national security in the short and medium term, including dramatic increases in funding and reforms to our research, development, and deployment system; demand reductions; and an expansion of domestic oil and natural gas production.
Shortly after developing the National Strategy, the ESLC commissioned the Interindustry Forecasting Project at the University of Maryland and Keybridge Research to study the long-term economic effects of their policy proposals. In short, the study shows, under the ESLC policy package, employment and disposable income would be higher, the trade balance would improve, and federal budgets would receive a boost from higher economic growth. Most importantly, however, the study finds that the U.S. economy would be far more able to withstand future oil shocks under the ESLC policy plan. In essence, the ESLC energy package can be thought of as a self-financing insurance policy that will make the economy more robust in good times and more resilient when subjected to energy shocks.
Specifically, the study finds that:
* By 2050, the typical U.S. household would have $4,046 more in annual income, an increase of nearly 2.1 percent.
* Over four decades, households would experience an aggregate increase of $13.9 trillion.
* When you add in lower energy costs, the average household would be able to enjoy $5,025 more every year by 2050.
* By 2050, annual oil imports would be lower by 6.6 million barrels; cumulatively, we will have imported nearly 60 billion fewer barrels of foreign oil by then.
* As a result, the U.S. trade balance would improve by about $275 billion by 2050.
* Because of the higher levels of income and GDP, net U.S. federal revenues would be a cumulative $1.46 trillion higher.
* By 2050, total employment would be 3 million jobs higher, including:
o 225,000 more jobs in manufacturing
o 514,000 more jobs in travel and tourism
o 108,000 more jobs in professional services
o 44,000 more jobs in agriculture
* Perhaps most important is what the ESLC policy package will do to help the economy withstand future oil shocks. Under the plan, in the event of a severe oil shock in the year 2040:
o Reduced dependence on imported oil will act as a $400 billion insurance policy for the U.S. economy.
o 1.8 million jobs would be saved.
o Difference in national disposable income would be $448 billion.
Members of the Energy Security Leadership Council
* Frederick W. Smith, Chairman, President and CEO, FedEx Corp. (Co-Chairman)
* General P.X. Kelley, USMC (Ret.), 28th Commandant, U.S. Marine Corps (Co-Chairman)
* General John P. Abizaid, US Army (Ret.), former Combatant Commander, U.S. Central Command
* Edgar M. Bronfman, retired Chairman, The Seagram Company, Ltd.
* General Bryan “Doug” Brown, US Army (Ret.), former Commander, U.S. Special Operations Command
* Admiral Vern Clark, USN (Ret.), former Chief of Naval Operations
* Adam M. Goldstein, President and CEO, Royal Caribbean International
* General John A. Gordon, USAF (Ret.), former Homeland Security Advisor to the President
* Maurice R. Greenberg, Chairman and CEO, C.V. Starr & Co., Inc.
* General John W. Handy, USAF (Ret.), former Commander of U.S. Transportation and Air Mobility Command
* Admiral Gregory G. Johnson, USN (Ret.), former Commander, U.S. Naval Forces, Europe
* Herbert D. Kelleher, Founder, Southwest Airlines Co.
* John F. Lehman, former Secretary of the U.S. Navy
* General Michael E. Ryan, USAF (Ret.), 16th Chief of Staff, U.S. Air Force
* Eric S. Schwartz, former Co-CEO, Asset Management, Goldman Sachs
* Michael R. Splinter, President and CEO, Applied Materials, Inc.
* Jeffrey C. Sprecher, CEO, IntercontinentalExchange | ICE
* David P. Steiner, CEO, Waste Management, Inc.
* Michael T. Strianese, President, CEO and Director, L-3 Communications
* General Charles F. Wald, USAF (Ret.), former Deputy Commander, U.S. European Command
* Josh S. Weston, Honorary Chairman, Automatic Data Processing, Inc.
