WASHINGTON, May 11. 2006 – The United States should avoid repeating the energy policy mistakes of the past and concentrate on a multi-pronged approach to meet the energy challenges of the future, API President and CEO Red Cavaney told a House panel on May 11.
In his testimony to the House Energy and Commerce Committee hearing on gasoline prices, Cavaney said the solution to the current energy challenges is to increase and diversify energy supplies, including alternatives, expand energy infrastructure and reduce demand through energy conservation and improved efficiency.
“We have sufficient domestic oil and gas resources remaining to be discovered in the U.S. – enough oil to power more than 60 million cars and heat more than 25 million homes for 60 years, and enough natural gas to heat 60 million homes for 160 years,” Cavaney said. “Only government policies stand in the way of increasing access to these resources, facilitating refining capacity and pipeline expansions, and increasing energy security.”
Cavaney said U.S. oil and natural gas companies understand the frustrations consumers have expressed about fuel price rises and the adverse impact higher prices have on individuals, businesses and, potentially, the nation’s economy. He said API member companies are working very hard to meet demand while also meeting some of the world’s most stringent environmental regulations. They are investing billions on expanding production and refining capacity, he said, noting that the oil and natural gas industry has reinvested $98 billion dollars since 2000 on emerging energy technologies, 73 percent of the total amount invested by the U.S. government and private sector companies combined.
During the week ending April 21, refineries were operating above 90 percent of capacity, and for the month of March, utilization at the refineries that were back to normal operations after the hurricanes was 90.8 percent, which is higher than for March 2005. To address refining capacity concerns, API member companies have spent billions of dollars to recover from last year’s devastating hurricanes and boost production capacity, Cavaney said. An additional 1.3 million barrels of new refining capacity is expected to come on stream between now and 2011.
The industry has also undertaken major investment to meet the 4 billion gallon Renewable Fuels Standard for 2006, while also delivering new gasoline with 90 percent less sulfur and on-road diesel fuel with 97 percent less sulfur, Cavaney noted.
“Oil and gas is a long lead-time business, and we are making the necessary reinvestments,’ Cavaney said in his testimony. “Since 1992, oil companies in the U.S. have reinvested more than $1 trillion, compared to their cumulative earnings over the same period of nearly $700 billion.”
Red Caveney's Opening Statement Before the House Energy and Commerce Committee (PDF)
Red Caveney's Complete Testimony Before the House Energy and Commerce Committee (PDF)
News media contact: Karen Matusic, (202) 682-8118