Review of Comeback: America’s New Economic Boom, by Charles R. Morris (PublicAffairs 2013), 192 pages, ISBN- 978-1610393362
America’s new energy abundance provides a timely escape hatch for our ailing economy, if politicians will simply take the shackles off of affordable energy production. Charles R. Morris documents this opportunity in his new book, Comeback: America’s New Economic Boom.
While Comeback should be a must-read for any student of the American economy, it is badly mistitled. It should in fact be titled, “A Prescription for a National Economic Recovery.” In the final chapter of his book, Morris explains why recovery is a necessary first step to an economic boom. He presents the dismal economic projections from the Organization for Economic Co-operation and Development (OECD). Then he goes on to say there can be a much more compelling growth narrative based on the primary subjects the book covers, which include our energy wealth, the resurgence of manufacturing, an infrastructure overhaul, and a vibrant new healthcare industry.
An Energy Revolution
Morris deals with each of these subjects thoroughly in only a 158-page narrative with no waste of words. He spends his first 44 pages on our shale gas revolution, teaching the reader all the details of how shale gas formed and how technology has allowed a very dispersed natural resource to be captured in huge quantities, nearly everywhere. New horizontal drilling techniques and improved hydro-fracturing methodology, which in an older form has been around for 60 years, gives us access to previously unimagined amounts of natural gas and oil locked in shale rock formations. He explains this as follows:
“Some 400 million years ago, much of the region between the western slopes of the Appalachians and the eastern slopes of the Rockies was covered by inland seas. In geologic time, sedimentary mud was compressed into thin layers of relatively impermeable shale rock, trapping decaying organic matter, which was gradually transformed into the multiple hydrocarbon compounds that humans burn for artificial light and heat.”
The reader is not likely to find a better, simpler, and more comprehensive explanation of the shale gas revolution than what is offered in this book. Morris describes, so clearly for the layman, how most of the shale gas is thousands of feet below the surface, fully protected from shallow groundwater wells. He explains how horizontal shafts may be driven miles into the shale, turning one degree at a time, as they move from vertical to horizontal. The shale is then perforated with small-spaced charges and fractured with high-pressure water containing sand grains and trace additives. The resulting fractures allow the collection of the trapped natural gas and oil.
The International Energy Agency (IEA) recently forecast that by 2020 the United States will surpass Saudi Arabia as the world’s largest oil producer, and Russia as the world’s largest natural gas producer, largely due to shale gas and oil.
Morris does an excellent job explaining the huge benefits accruing to our manufacturing industries with the declining cost of energy, often giving us a three-to-one advantage in energy costs versus the countries from which we have long imported goods. He also discusses the debate in which the chemical industry argues for laws preventing natural gas companies from exporting natural gas to other companies. The chemical industry, which frequently advocates against government intrusion in its own industry, is more than willing to impose government intrusion in other industries in order to keep chemical industry production prices artificially low.
Assessing Our National Infrastructure
Before moving to an extremely optimistic closing chapter, Morris does an excellent job of assessing the decline of our nation’s infrastructure, including dams, highways, water supply, wastewater systems, mass transit, and bridges. He bemoans what he calls a bias against such important issues as a result of our current disdain for tax increases. Even people who disagree with his policy suggestions will enjoy his research on the condition of our infrastructure.
Health Care Challenges
Morris’ treatment of health care is enlightening. He characterizes the major advances in lifesaving technologies as having led to much higher health care costs than would have resulted from premature deaths. Concurrently, the improvement of many surgical procedures has greatly increased the demand for them. The same holds true for the demand for more effective drugs. Morris says, “From the time of Adam Smith we’ve known that lower costs and improved conveniences expand markets.”
With all the great advances in medicine, Morris blames increasing health care costs on the dramatic changes from yesteryear in which family doctors made house calls. His analysis of the confusion the Affordable Care Act is going to create is outstanding and likely correct, though he believes it could lead most of us to managed care systems such as the one Kaiser Permanente has run for many decades.
Tying It All Together
Morris concludes his book on a positive note, with the following statement:
“The combination of rising American productivity and the new X-factor, the American energy advantage, offers huge opportunities. We can rebuild our middle classes, provide reasonable social safety nets and health care, shore up our sagging infrastructure, and get our national debt under control. That’s what economic growth can do.”
Jay Lehr, Ph.D. ([email protected]) is science director of The Heartland Institute.