Below are highlights from a speech given by Jack Gerard, API, President and CEO at a panel discussion on a new era in American energy.
“I want to share with you the highlights of a study that will help to frame today’s discussion and that will provide direction to the national energy policy conversation during the 2016 election season. We commissioned a study by Wood Mackenzie to emphasise and quantify why policy matters when it comes to energy policy.
“The study is called A Comparison of US Oil and Natural Gas Policies – Pro Development Policies vs. Proposed Constraints and it makes clear the potential reward of pro energy development policies and the possible long term economic harm that could result from many of the regulatory constraints and barriers to energy production, transportation and refining imposed or under consideration by the government. Some of the prodevelopment policies considered include increased access to energy resources offshore, a more efficient permitting process onshore, quicker approval of energy infrastructure projects, allowing the free market to determine the scope of LNG exports, and lifting of the decades old ban on crude oil exports, a vestige of our nation’s era of energy scarcity.
“Some of the regulatory constraining policies under consideration, across the industry, proposed or implemented by the federal government include EPA’s proposed ozone rule, the Bureau of Land Management’s hydraulic fracturing rule, the Pipeline and Hazardous Materials Safety Administration’s proposed rule on tank car safety, the Bureau of Ocean Energy Management’s blowout preventer rule, the Fish and Wildlife Service’s Sage Grouse protection rules, new rules by EPA that regulate emissions from refineries, the agency’s new definition of Waters and the US under the Clean Water Act and the Renewable Fuel Standard, also a relic of our nation’s once uncertain energy future.”
“Broadly, the study found that by 2035 prodevelopment policies could increase US production by approximately 8 million bbls of oil equivalent /d, support 2.3 million more jobs in the US economy, a million of those jobs in the next decade, provide a cumulative US$1.1 trillion in additional revenue to the government, add US$443 billion/y to the nation’s GDP and US$118 billion/y to the nation’s household income.
“Conversely the study estimates that the combined negative impact of proposed and imposed federal regulations could reduce US energy production by approximately 3.4 million bbls of oil equivalent /d, reduce jobs supported by the industry in the US by 830 000, reduce revenue to the government by a cumulative US$500 billion and shrink our nation’s GDP by US$133 billion/y. The study vividly illustrates what’s at stake putting into sharp contrast the tremendous difference between the benefits we could accrue from pro energy policies and the negative effects of policy decisions that are anti energy.”
“The difference in job creation is over 3 million jobs or greater than the population of our nation’s third largest city, Chicago. And jobs in the oil and natural gas industry are well paying, the average wage for a worker in the upstream, midstream and refining sectors was a little more than US$96 500 in 2013. That’s 94% higher than the national average private sector salary of US$49 701. And regulatory constraints could reduce combined gasoline and diesel fuel production by half a million bpd. All of which makes clear that when it comes to, economic growth, job creation, national security and remaining a global energy leader, policy matters.”
The American moment
“Paradoxically, our nation’s rise to become a global leader in energy production, what we call the American moment, was the result of innovations in hydraulic fracturing, horizontal drilling and state of the art refineries, and encouraged by America’s unique private property and free market system, not forward looking energy policies put forth by government. In fact, it has been the oil and natural gas industry that has lead the way on safety and environmental protection. Just last week the Harvard Business School and the Boston Consulting Group published a report: America’s Unconventional Energy Opportunities, which noted that unconventional resources are the ‘single largest opportunity to improve the trajectory of the US economy.’ We’ve achieved this level of success by focussing on science and the facts, not political ideology.”
“Because achieving global energy leadership and energy abundance and security is not a Blue State or Red State issue; it is an economic growth, American prosperity and national security imperative. American energy policy should focus on building upon the gains we’ve made to ensure that America remains a positive force on the world energy market and that all Americans benefit from their nation’s emergence as a global energy leader.”
“Looking ahead to the 2016 elections, we’ll be encouraging a comprehensive conversation about our energy future by engaging voters/consumers and policymakers through our Vote4Energy education and advocacy effort. We will work to advance a productive, fact based national energy policy discussion through the 2016 election and beyond. Vote4Energy is focused on a bright energy future benefitting all Americans and will guide the energy policy discussion away from partisanship and political ideology and demagoguery that argues for less. And instead toward a rational, thoughtful and consumer focused discussion on American 21st century energy abundance, security and leadership so that whomever the next president of the US is, or which party controls Congress, governor mansions and state legislatures, that they too appreciate the tremendous energy opportunity we have today and sustain it by getting our nation’s energy policy right.
“Vote4Energy will stay above partisanship. It won’t target a particular person, nor be limited to a specific region. Our campaign captures the fundamental energy policy question we face; the heart of America’s energy policy discussion and decision: whether to pursue an American future of energy abundance, self sufficiency and global leadership or take a step back to the era of American energy scarcity, dependence and economic uncertainty.”
“The next president, members of Congress and state lawmakers and chief executives will be tasked with helping to decide whether our nation continues as a global energy leader, a once in a lifetime choice, or reverts back to energy scarcity and dependence; because like policy, elections also matter when it comes to energy policy. Armed with the positive economic and consumer data from Wood Mackenzie and other studies, and promoted by our Vote4Energy advocacy and education campaign, we will work to ensure that candidates for elective offices and the public have the facts, understand what's at stake so that our nation will build on the tremendous progress America has made in reversing decades of energy dependency and take full advantage of our country’s tremendous energy potential.”
Edited from speech by Claira Lloyd