Energy is inseparable from America’s economic growth and job creation, but the United States will need to create the right energy policy to encourage production of oil, natural gas, coal and other energy resources, said American Petroleum Institute (API) President and CEO Jack Gerard during a speech discussing details of API’s 2015 State of American Energy Report.
Since API’s first State of Energy report released in 2011, the United States has left behind decades of energy scarcity to become a global leader in energy production, Gerard told attendees at API’s 2015 State of American Energy address Tuesday in Washington, D.C.
Now the number one natural gas producer in the world, the United States also ranks number one in petroleum refining, and is expected to become the top oil producer in the world as early as this year, though some have projected the United States is already there, Gerard said.
Driven by American ingenuity and technological advancements in hydraulic fracturing and horizontal drilling, shale production has presented the nation the opportunity “to permanently diminish what have been our nation’s largest economic and geopolitical vulnerabilities: domestic energy scarcity and dependence on foreign countries to meet our nation’s energy needs,” said Gerard.
Fossil fuels will continue to meet most of the world’s energy needs well into the 21st century. According to the U.S. Energy Information Administration, oil, natural gas and coal will account for 80 percent of the United States’ energy consumption, Gerard said. However, for this year’s report, API decided to focus not only on oil and gas, but other U.S. energy sectors such as solar, wind, coal, nuclear, natural gas and renewables, all which will remain essential to successfully meet future U.S. energy needs.
While the United States stands at the threshold of a sustained era of American global energy leadership, some in U.S. society remain mired in the nation’s decades-long energy scarcity past, said Gerard. Citing an API election night poll that found increasing U.S. voter support for energy development despite party affiliation, particularly for oil and gas, Gerard noted that a true “all-of-the-above” approach to U.S. energy policy is needed.
Gerard said he already sees this occurring with the bipartisan support in the Senate to pass the Keystone XL pipeline project. On Tuesday, U.S. Senators John Hoeven (R-N.D.) and Joe Manchin (D-W.Va.) introduced the Hoeven-Manchin bill, S. 1, the first piece of legislation brought to the floor of the 114th Congress, to approve the Keystone pipeline project. Sixty senators are cosponsoring the bill, and 63 senators have indicated supported for the bill at this point.
Gerard said the “needlessly protracted fight” over Keystone has deprived tens of thousands of workers of good paying jobs, delayed construction of much-needed energy transportation, and has had a chilling effect on infrastructure investment, which is needed and could generate massive economic gains. U.S. infrastructure improvements in oil and gas alone could, over the next decade, encourage as much as $1.15 trillion in new private capital investment, support 1.15 million new jobs, and add $120 billion on average per year to U.S. gross domestic product.
Other examples of regulatory policies that will stymie energy production growth and associated revenue and job creation include calls for regulating methane emissions. These calls have been made by a few elected officials who cling to an outmoded view of energy production despite a recent U.S. Environmental Protection Agency study that found methane emissions from hydraulic fracturing have fallen by 73 percent since 2011 despite a significant increase in energy production. Gerard attributed this decline to investment by the oil and gas industry in low and zero-carbon emitting technologies. Since 1990, the industry has invested $284 billion toward improving the environmental performance of its products, facilities and operations.
Gerard said he believes the United States has an opportunity and responsibility to use the United States’ vast energy resources to help meet growing global demand. According to the International Energy Agency, one-fifth of the world’s population, or 1.3 billion people, lack access to electricity entirely and nearly half of the global population lacks access to reliable electricity.
He also cited the Renewable Fuel Standard as an example of bad energy policy still mired in the past, and the growing environmental regulations on U.S. consumers and businesses that do little or nothing to advance public health, but significantly harm U.S. energy production potential and global energy leadership.
The U.S. ban on crude oil exports, once an integral part of U.S. energy strategy, now is a burdensome relic of the U.S. era of energy scarcity. Gerard sees moves by lawmakers to lift the U.S. ban on crude exports as a positive step away from a relic of an energy scarcity past, which will lower consumer gasoline prices and create jobs.
The record growth in production and refining records also created 600,000 new jobs between 2009 and 2011, and added significantly to global energy supply, leading to reduced prices that has benefited consumers, Gerard noted. With about half of the industry’s current technical personnel expected to retire in the next 7 to 10 years, the oil and gas industry’s long-term hiring needs will continue to grow to replace these workers and hire additional workers.
“Replacing these jobs and creating new ones presents an historic opportunity to create an oil and natural gas workforce that reflects the increasing diversity of our nation,” Gerard noted.
According to API’s report, “Minority and Female Employment in the Oil & Gas and Petrochemical Industries”, 950,000 job opportunities could be created by 2020 and nearly 1.3 million job opportunities could be created through 2030 across in the United States in the oil and gas and petrochemical industries. The API estimates that African American and Hispanic workers could comprise almost 20 percent, or 408,000, of the new hires in management, business and financial jobs through 2030.
Despite lower oil prices, Gerard said API still views the oil and gas industry as a long-term source of job creation in the United States, noting that long-term projections for energy demand, particularly oil demand, are expected to keep rising.
“The men and women who work in America’s oil and gas industry share with their colleagues in the solar, hydropower, coal, wind, renewables, nuclear energy and energy efficiency industries the goal of meeting the energy needs of our nation and the world.”
“Energy is central to our way of life and we will need more of it for many years to come,” said Gerard.