As prepared for delivery
Press briefing teleconference on energy policy and the administration
Jack Gerard, API president and CEO
Thursday, February 23, 2012
Good morning everyone. Thanks for calling in.
Later this morning the president will discuss energy policy and as part of that is expected to say his administration is encouraging more oil and natural gas development as part of an all-of-the-above strategy for addressing U.S. energy security and higher gasoline prices. This follows similar remarks in the president’s State of the Union address in January.
On first impression, this sounds good. More oil and natural gas development here at home would benefit the nation. It would increase the security of our energy supplies, create jobs, boost revenue to our government, and help put downward pressure on prices at the pump.
Unfortunately, the administration’s actions and its policy proposals are out of synch with its words.
The administration is restricting where oil and natural gas development may occur, leasing less often, shortening lease terms, going slow on permit approvals, and increasing or threatening to increase industry’s development costs through higher taxes, higher royalty rates, higher minimum lease bids, and more regulations.
Keeping 85 percent of our offshore areas off limits – per the administration’s latest offshore energy plan – is not a prescription for increased oil and natural gas production.
Decreasing oil and gas leasing in the Rockies by 70 percent is not generating the jobs and more affordable energy that America’s workers and consumers need.
Having ten federal agencies planning more regulation of hydraulic fracturing, which is key to oil and natural gas development, is not keeping affordable supplies of gas flowing to generate electricity, heat homes, and supply chemical plants.
Rejecting the Keystone XL pipeline is not increasing American access to supplies of affordable, secure energy that would allow us produce more of the gasoline and other fuels we’ll need.
And increasing taxes on oil and gas companies by $85 billion, as the administration has proposed, will not encourage more energy investment or jobs in the United States.
We continue to hear about the need to eliminate “subsidies” for the industry. The industry receives not ONE subsidy, and it is one of the largest contributors of revenue to our government of any industry in America. The oil and natural gas industry doesn’t get the guaranteed loans made famous by the Solyndra affair, for example. It takes tax deductions the same or similar to what all other American companies get to recover their costs of doing business.
In addition to paying its fair share of taxes, the industry is also investing massive sums in new technology and energy development. These investments support 9.2 million jobs and produce income that helps support millions of America’s retirees. By expanding these investments under more reasonable tax and access policies, we could create over one million new jobs in just 7 years.
But what is being proposed – an $85 billion tax hike – will chase energy investment out of the country. It will stifle job creation, drive up imports – and our trade deficit – and increase the volatility of gasoline markets.
The administration suggests that its policies are, in fact, already increasing oil production. This couldn’t be farther from the truth. While oil production is up, the increase relates almost entirely to investment and leasing decisions made before, sometimes long before, this administration came into office. The increase is also due to oil and gas development on private and state lands over which the administration has little or no control at all. We have some additional information on this we’ll send to you after the call.
Certainly, it’s better to hear the administration talk about more oil and natural gas development than to hear it call oil “yesterday’s” energy, as the president did during last year’s State of the Union address.
But words are not leadership if not followed by the right actions. We don’t know whether the president is committed to more domestic development and reasonable energy policies or is still harboring the idea he and his secretary of energy expressed before the election that higher gasoline prices might actually make sense as a part of our national energy policy because they would make us more energy efficient and encourage green energy.
The administration’s own projections tell us that we’re still going to rely on oil and natural gas for nearly 60 percent of our energy for the next quarter century. We’re either going to produce that oil and gas in the U.S. with the added benefits of creating over a million new American jobs, strengthening our national security, and generating more revenue for our government – or we’re going to depend more on resources from less stable parts of the world.
The President has an opportunity to put America’s energy destiny back into our own hands, and his words about doing so need to be followed up with actions that will make it happen.