As prepared for delivery
V4E: Energy and the Economy
Jack Gerard, API President and CEO
October 25, 2012
Good morning everyone. I’m Jack Gerard, president and CEO of the American Petroleum Institute. Thank you for joining us this morning.
The oil and natural gas industry has spent the last 10 months engaging American voters in a discussion of our energy future – and encouraged them to make energy a ballot box issue this year – through the Vote 4 Energy campaign.
The Vote 4 Energy campaign was designed to encourage a wider discussion of our energy choices … we held events in Illinois, Michigan, Pennsylvania, Ohio, Missouri, Colorado, West Virginia, Iowa and elsewhere—to encourage a robust dialogue on the issues.
A vote for energy is not a vote for a person, or a party, or even a philosophy. It’s a vote to make energy part of our national discussion.
An election year is a good time for a conversation about our energy future. Just as the decisions voters make in November will determine our political leaders, the decisions those leaders make on energy policies and programs will have far-reaching impacts on our country.
The question facing America is not whether we will continue to need oil and natural gas in the decades to come. We need more energy of all types and we must stop thinking about our energy resources as “scarce” or as a zero sum game, where we can only have more of one type of energy if we have less of another.
We must be clear: according to the government’s own projections, even with a significant growth in renewables and with major advances in energy efficiency, oil and natural gas supply most of the energy we use now and will continue to do so for generations.
I believe we must acknowledge this energy reality and make the choices that will lead us to a greater energy future … a future with more jobs, more economic growth, higher government revenues and greater energy security.
This is a vitally important issue for our nation, because of the unique and essential role energy plays in our economy… and because the promise offered by domestic resources of oil and natural gas is on an incredibly steep trajectory in the next several years.
Just a year ago, we learned unconventional resources of natural gas supported 600,000 jobs in 2010. This week, we learned that that number has grown to over 900,000 in 2012. Both unconventional natural gas and oil development will support 762,000 additional new jobs within just three years … and 1.7 million new jobs by 2035. These are not conditional benefits – dependent on a policy wish list – these are the benefits of what oil and natural gas companies are doing today. I’m looking forward to hearing more from John Larson of IHS about that study later this morning, during the roundtable session.
Study after study has shown similar results: we can produce more of the energy we need here at home, and doing so will create hundreds of thousands of good jobs for Americans who need them. Doing so will also help to drive down energy and raw material costs for manufacturers, reduce consumer home heating and electricity costs, and send billions in additional revenue to government.
In Pennsylvania, shale drilling has created more than 150,000 additional jobs since 2009. And just last week, the governor distributed over $200 million to each counties and municipalities in Pennsylvania as a result of this activity.
In North Dakota, where oil production has increased 600 percent in the last five years, the unemployment rate is the lowest rate in the nation and produced a budget surplus of more than $2 billion. A billion may not sound like much by Washington standards, but it means a lot to North Dakota where the total state budget is $4 billion.
And a political and policy commitment to developing our domestic oil and natural gas resources can help provide financial security for millions of Americans, who hold 97 percent of corporate shares of oil and natural gas companies through public and private pension and retirement funds – such as 401(k)’s, IRA’s, individual investments and financial institutions.
The revolution in shale energy is tilting the world’s energy axis towards the Western Hemisphere and toward the United States. This realignment could affect the global energy landscape and our economy for the rest of the century.
Although the United States and other nations in the Americas have long produced significant amounts of energy, they now have the potential to produce much more – and are beginning to realize that potential. We’re seeing it now with shale energy development in the U.S. We’re seeing it in Canada with its oil sands development. We’re seeing it around the world as companies invest globally in offshore resources and oil production.
The United States has become the world’s largest natural gas producer. It’s sitting on natural gas supplies that could provide all its needs for well over 100 years. In fact, even five years ago we were preparing to import liquefied natural gas, but this revolutionary change has altered the landscape so dramatically it is now much more likely that we could soon be able to export excess production to customers abroad.
We’re also producing more crude oil and other petroleum liquids here at home and now import less than half what we consume. Just to the north, Canada has significantly upped its oil production as a result of oil sands development; its oil reserves are surpassed only by Saudi Arabia.
A revolution is occurring, and it is bringing good news for our economy and for American workers and a significant increase in government revenues. But how this revolution turns out is not a given and its benefits are not guaranteed.
A common sense regulatory structure is necessary to support and encourage that development rather than one that imposes excessive or duplicative rules that provide no added benefit. The kind of regulatory structures and oversight we operate under can either nurture this opportunity or kill it.
We need a tax system that includes certainty … one that operates fairly across industries and does not punish single sectors … a system that welcomes capital investments in new projects and energy production. Our future relies on an approach that encourages businesses to invest and grow here in the United States rather than discouraging it.
Today’s forum is part of the dialogue and outreach we at API have been facilitating to help encourage sound policies and good decisions. If we make the right decisions, all Americans can make the most of the tremendous new opportunities that lie ahead.
I am particularly glad to have Sean McGarvey join us this morning. Sean became the president of the Building and Construction Trades Department this spring and API has worked extensively with his organization over the last four years as part of industry’s Labor Management Committee.
Few have more at stake in our nation’s energy future, as the investment and development will create jobs for his members almost immediately. And we welcomed the opportunity to highlight our joint interests through Vote 4 Energy events this year … including an event that focused on an important program to help returning veterans find jobs in the energy sector.
Please join me in welcoming Sean McGarvey.