The price of oil is low and some in the energy industry are sweating in a calamity of the unknown. However, America stands on the cusp of becoming an unprecedented energy leader in the world market. Proven reserves of crude oil and light condensate in United States are at a 40-year high with many thanks to the massive oil production from the country’s shale fields. The United States has surpassed its competitors to become the top natural-gas producing country in the world according to the BP 2014 Statistical World Energy Review. Local economies are booming around petroleum production across the nation.
Gearing up for its leadership into America’s energy future, today, President and CEO of the American Petroleum Institute (API) Jack Gerard presented the 2015 State of American Energy speech. He focused not only on continuing the energy revolution but also breathing new life into the boom and making it flourish in economic growth, job creation and energy security.
Gerard deemed this point in time as “The American Moment” where the current state of abundance and global leadership is something no one would have predicted just a few years ago. “This unique American moment is the result primarily of American ingenuity and technological advancements in hydraulic fracturing and horizontal drilling.” He noted that the United States is expected to soon become the number one producer in oil production, and some believe we already are.
Export ban and becoming a world leader
With a call for leadership from the President and Congress, the API supports lifting the current oil export ban. Gerard tipped his hat to the recent efforts of the Obama administration in alleviating particular condensate for exportation. By lifting the ban, Gerard exclaimed this move would stimulate more production at home and further the already abundant job creation oil and gas has stimulated.
“Crude oil export ban-this is the 20th century scarcity ideology, not 21st century prosperity. Lifting the ban would send a clear signal to friend and foe alike that our nation takes seriously its role as an energy leader,” Gerard stated to the room. “Our vision of the world is one where more and more people have access to reliable safe and affordable energy, no matter what country or continent they call home.”
The International Energy Agency (IEA) found that one-fifth of the world’s population lacks complete access to electricity and half lack access to reliable electricity. “We have an opportunity, and I believe a responsibility to use our nation’s vast energy resources to help meet the world’s ever-growing demand,” Gerard emphasized.
Additionally, Gerard held the confidence that “crude oil exports are good for American consumers.” He explained that by supplying the global market with more product, we can assure energy costs and gas prices remain low, which is great for the general public and American business’s global competitiveness.
Figures offered by a Goldman Sachs economic analysis claimed lower gas prices dropping 60 cents at the end of 2014 equated to an economic impact on the United States’ economy of a one-time tax cut of between $100 billion and $125 billion. Gerard stated that other studies estimated that for every 1-cent drop in the retail price of gasoline for a year, American consumers save $1.2 billion.
Also, Gerard explained that the move to export and expand energy production has the potential to diminish the country’s largest economic and geopolitical vulnerability. “That opportunity should transcend political parties.”
It should not be about Republicans, Democrats or Independents. It’s about all Americans benefiting from our nation’s emergence as an energy leader. Broadly, it is about ensuring that America remains a positive force on the world energy market.”
Jobs for all Americans
In a commissioned API report, analysts estimated that over 950,000 job opportunities could be created by 2020, in addition to nearly 1.3 million job opportunities through 2030 across the country in the oil and natural gas and petrochemicals industries.
“During this new era our nation has not only set production and refining records,” Gerard noted, but it has also “created 600,000 jobs between 2009 and 2011.”
“Over the next 7 to 10 years, half of our technical personnel workforce in this industry will retire,” Gerard told the crowd. He made a point to recognize the huge this is not only for Americans in general, but for underrepresented populations in the industry such as women and minorities, in particular.
“At a minimum [an API] report estimates that African American and Hispanic workers could make up nearly 20 percent of new hires in management, business, and financial jobs through 2030.” Gerard elaborated that filling the jobs of retirees and creating new ones presents an historic opportunity to create an oil and natural gas workforce that reflects the increasing diversity of the United States.
Keystone XL Pipeline
The hottest topic in national energy policy was heavily covered by Jack Gerard. In a serendipitous moment, during the time allocated for questions, a reporter made note that today the White House said the President would veto the current Keystone pipeline legislation moving through Congress.
“Obviously we’re disappointed,” Gerard replied. “I believe sometime in 2015 the Keystone XL pipeline will be approved. The bill introduced this morning had 60 co-sponsors and 63 members of the Senate saying they are for it. I think they are following the support of the American people. I’m disappointed if the President has made that decision.”
Gerard addressed the major criticism of job creation fluffed up by Keystone supporters. “They’re temporary jobs by nature. They move from project to project, but this current department has concluded 40,000 jobs. The Hoover Dam, Golden Gate Bridge, were built with temporary jobs. The presidency is a temporary job, but that doesn’t make them less important.” He furthered this point by stating later that Americans will build the pipeline, and Americans would maintain that pipeline. Gerard also stated that he’s hopeful the debate will not come down to a veto override.
Aside from the jobs and the role Keystone would play in North American energy production, Gerard wanted to correct what the API saw as fallacies in the Keystone debate. In a retort to Obama’s comments in November, were he stated that the economic benefits of the pipeline were low and the risks were high, Gerard claimed what the president said was factually incorrect.
“The state department has concluded that that oil would be refined in the gulf coast. We have the world’s best refineries able to environmentally responsibly handle that crude. Crude oil exports would actually lower the prices of gasoline. It may seem counterintuitive, but more oil in the global market supply brings down the price. The industry doesn’t set the price the market does.” He also noted that 20 percent of the Keystone’s production is estimated to hold Bakken crude.
Environmentalist forces and New York’s ban
Last year brought forth numerous setbacks for hard energy production including a ban in Texas and New York along with new national greenhouse gas regulations. But Jack Gerard wanted to make it clear that the energy industry is second to no one in finding new ways to finding the path in which energy prosperity and environmental progress can co-exist.
According to Gerard, since 1990, the oil and natural gas industry has invested $284 billion toward improving the environmental performance of its products, facilities and operations. “From 2000 through 2012, the industry has spent more on low and zero-carbon emitting technologies than the federal government has spent, and that total is nearly as much as all other industries’ spending on these technologies combined.”
When asked about the recent move from New York regulators to ban hydraulic fracturing in the state Gerard responded, “The [New York] ban in the short term denies property owners and those who want good paying jobs of that prosperity. Pennsylvania is probably cheering it, and Ohio is probably cheering, because it creates more opportunity for them. But we think everyone should have the opportunity. No one would have thought 10 to 15 years ago that North Dakota would have become the 2nd biggest oil producer in the U.S.”
Speaking on behalf of the API, Jack Gerald felt that the ever-increasing environmental regulations do nothing for public health, and that the proposed ozone regulations put thousands of jobs at risk. “Our greenhouse gas emissions are at 20 year low,” stated Gerard. This, he concludes, was driven by natural gas and America’s energy renaissance rather than simply federal regulation.
“We will continue to work with anyone interested in transforming this American moment of energy abundance and global energy leadership into a decades-long energy reality that creates jobs and sustained economic growth for all Americans.”