First Things First

Fracking Has Made America More Energy Secure

The attacks on petroleum facilities in Saudi Arabia last weekend are a reminder that the need for energy security is ever present.

Having access to abundant, affordable energy is imperative for America’s economy.

After the attacks, oil prices rose about 15%. The market saw there was risk of reduced supply and adjusted accordingly.

But there was no panic or oil shortages. There was nothing like the gas shortages of the 1970s when Middle Eastern countries disrupted oil supplies. And oil prices are still at historically moderate levels.  In fact, prices didn’t even reach six-month highs. Instead, consumers could see a 10 to 20 cent increase per gallon of gas.

One reason is domestic oil production has doubled in the last 10 years. For this we can thank hydraulic fracturing – fracking.

Yet there are those – including presidential candidates – who think banning fracking would be good policy.

It wouldn’t for a few reasons. First, there are the economic effects.

14.8 million jobs, $1.6 trillion in annual GDP, and $3,914 per household would be the cost of a fracking ban, according to a report from the U.S. Chamber’s Global Energy Institute.

Without fracking we wouldn’t see as much chemical and plastics industry investment in shale energy-rich states like Texas and Pennsylvania.

The U.S. is producing so much oil and natural gas that the Energy Information Administration estimates that next year we will be a net energy exporter for the first time in nearly 70 years.

There are also the energy security implications. As fracking has resulted in U.S. oil and natural gas production reaching historic levels, American energy security has improved, according to the most recent Global Energy Institute U.S. Energy Security Risk Index.

More reliable and affordable energy sources are what businesses need to invest in new factories that support good-paying jobs.

The world is an unpredictable place. But in the energy space it’s good to know that American entrepreneurial know-how and good policies help businesses and consumers better manage any unforeseen circumstances.

Diving In

Crashing cars for a living. Sounds fun? Since 1992 the Insurance Institute for Highway Safety [IIHS] has been purposely doing this in its central Virginia facility to test automobile safety. Here’s how they do it:

Vehicles are weighed and measured when they get to the research center for the more destructive tests, and the IIHS uses those numbers to measure crash effects and keep variables constant. Sometimes equipment needs to go in vehicles for testing, [IIHS Chief Research Officer David] Zuby said, and extra weight, like spare tires, has to get shaved off to bring it back down to what it was.

But before they get smashed, there’s some prep work.

“We drain the gasoline out and replace it with a mineral spirits that are less volatile, so we don’t have explosions or fires,” Zuby said. “We also remove the coolant and the engine oil, because often times the hoses and stuff that contain that will be broken or ripped during the crash test, and they just leak out onto the floor.”

Then, they get smashed—five vehicles, five times, if necessary. The organization currently does three frontal crash tests, a side test and a test for roof strength, and every crash test requires a fresh, clean, new car to destroy. Some tests aren’t destructive—like the ones for braking systems and headlights—and, if scheduled, cars do those tests before getting crashed.

“There’s a lot of broken glass, broken plastic [and] chunks of metal,” Zuby said.

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Caught My Eye

Commercial contractors continue to be bullish on the economy. The Q3 2019 USG Corporation + U.S. Chamber of Commerce Commercial Construction Index climbed to a record high score of 77.

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The Big Picture

“If we care about United States jobs and economic opportunity for our citizens, we will ratify the USMCA,” said Arizona Governor Doug Ducey at a U.S. Chamber press conference on the U.S.-Mexico-Canada Agreement.

Looking Ahead

September 24, 2019: the U.S. Chamber of Commerce hosts Countering Human Trafficking, highlighting the key role businesses play in preventing human trafficking. Top experts from government, the private sector, and the transportation industry will discuss best practices.

September 27, 2019: Civics education, civic engagement, and civil discourse in America will be the focus of the U.S. Chamber of Commerce Foundation’s Civics Forward summit.

October 24, 2019: The U.S. Chamber of Commerce Foundation's national workforce conference, Talent Forward 2019, will convene education and workforce experts to discuss the future of talent and the future of work.

To Play Us Out

Let's end this with some Stevie Wonder. Have a good weekend.

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