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Jack Gerard's report to the Platform Committees

As prepared for delivery 

Report to the Platform Committees
Jack Gerard, president and CEO of the American Petroleum Institute

May 15, 2012 

Good morning.

I’m Jack Gerard, President and CEO of the American Petroleum Institute.

Thank you for coming.

Today’s event is one of many the American Petroleum Institute will be holding this year…
…to engage policymakers—and voters—in a conversation about our energy future.

I’m sure this morning’s panel discussion will be of great interest and (I hope) …

…provide some insight into the political and policy conversations around energy.

A presidential election year is a good time for a comprehensive conversation about our energy policy direction…

…for just as the decisions voters make in November will determine our political leadership…

…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.

The question is: where will we get it?

Will we use our own vast energy resources or rely on others?

It’s true we’ll need energy of all types, but let’s be clear:

According to the government’s own projections, 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.

Those choices are laid out in API’s Report to the Platform Committees available on the back table.

API has launched the Vote 4 Energy campaign to bring those choices into a wider public debate this year.

We’ve already held events in Illinois and Michigan …

… we’ll soon host events in Pennsylvania, Ohio, Missouri, Colorado, West Virginia and elsewhere …

… to encourage a robust dialogue on our energy future, like the one we’re having today.

A vote for energy is not a vote for a person, or a party, or even a philosophy.

It’s a vote for America and our future.

With the right leadership and vision we can take control of our energy future.

We have the resources.

Including shale gas, the U.S. has the most technically recoverable oil and natural gas in the world…

… more than Saudi Arabia, or Brazil, or China … more than Iran-Iraq-Libya-and Kuwait combined.

Greater access to domestic resources is the cornerstone of our energy future … and the first plank in our Report to the Platform Committees … all else rests upon it.

Developing our onshore and offshore resources, including Alaska, …

… and strengthening our energy partnership with Canada, could mean 1.4 million new jobs by 2030, …

with one million of those jobs created in just seven years …

…that’s in addition to the more than 9 million jobs supported by this industry right now.

That’s good news for American workers and for our government.

Pro-development energy policies could return $803 billion in government revenues by 2030.

Safely accessing more of our country’s own resources, using our country’s own workers…

…would mean more money from industry to government through royalties, leases, bonus bids and corporate taxes.

Right now, that’s more than $86 million every day—if we do more tomorrow, it will mean more as well.

More access doesn’t just mean more jobs, more economic growth and more revenues for the treasury.

It means something every candidate will talk about this year: it means greater energy security.

Energy geopolitics are rebalancing—and the Western Hemisphere, with the U.S., Canada and Brazil, is at the forefront.

This is not a vision of America at the mercy of other oil-producing regions, or an America threatened by scarce resources…

…but of an America that holds the reins to her energy security and future prosperity.

There are trillions of dollars worth of still-to-be-developed oil and natural gas here in the United States.

Whether it’s the latest in directional drilling and hydraulic fracturing …

or in deep water exploration …

… advances in technology are making every discovery potentially more productive while also improving our ability to conduct our operations more safely and responsibly.

But, 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.

This is the second plank of our platform report.

A former EPA official’s comments about “crucifying” oil and natural gas companies…

… are a visible indication of a regulatory approach that is adversarial and perhaps hostile.

We are calling for a transparent and open regulatory approach that invites input from the industry’s best and brightest …

… and bases rulemakings on sound science, legitimate cost-benefit analysis and economic impact.

This approach would help prevent the kind of regulatory blizzard the White House recently moved to head off …

… one where multiple rulemakings overlap and pile on top of each other, adding untold costs without any benefit.

EPA’s Tier 3 effort to further reduce sulfur emissions is just one example …

… the agency rolls forward without any justification offered and without regard to the impacts on fuel prices.

We need a new approach that keeps energy development from falling prey to the regulatory snarl of overlapping or unnecessary rules …

…while providing greater certainty.

We need an approach that encourages business investment rather than discouraging it.

With expanded access and a regulatory approach that fosters domestic oil and natural gas production and refining …

… we could see energy investments here in the U.S. that boost our economic recovery.

The oil and natural gas industry has been a bright spot in our troubled economy …

… accounting for 3 percent of all jobs created since 2009, while spurring American manufacturing and revitalizing communities.

Through a more efficient and timely permitting process—the third plank of our platform report— …

… we can develop and refine domestic supplies of oil and natural gas to the highest standards …

… creating home-grown energy that’s ready to work for America’s businesses and families.

Now, this vision is threatened by those who want to restrain oil and natural gas development …

… or keep these vital resources beyond reach.

They favor only certain resources and particular investments.

They applaud only some of our abundant energy supplies.

They obstruct and delay oil and natural gas investments with a strategy of erecting legal hurdles …

… and by calling for increased taxes on oil and natural gas companies.

While some like to bash Big Oil …

… Big Oil actually is the Big Taxpayer.

Three of our companies topped Forbes’ recent list of companies that paid the most income taxes in 2011.

We pay our fair share.

In fact, oil and natural gas companies pay taxes at a considerably higher rate than other S&P Industrials …

… just over 40 percent compared to 25 percent.

Meanwhile, since 2000, our industry has invested nearly $2.4 Trillion in U.S. capital projects …

… to meet the growing demand for energy.

Because the industry must plan, invest and operate under long lead times …

… it is crucial for managing financial risk … 

… that government regulatory policies and the tax framework encourage investment and provide certainty for business planning.

The fourth plank of our platform calls for a market-based approach to energy …

… and an end to government picking winners and losers through calls for punitive tax hikes.

Higher taxes could make some energy investments too costly to pursue …

… put upward pressure on energy prices …

… and undermine the savings and retirement plans of millions of Americans—

the true owners of Big Oil.

Millions of Americans hold 97 percent of corporate shares …

… through public and private pension and retirement funds —

… such as 401(k)’s, IRA’s, individual investments and financial institutions,

… according to a recent Sonecon study.

A political and policy commitment to a developing our domestic oil and natural gas resources …

… will provide not just energy security, but financial security for millions of Americans.

Polls show most Americans think we’re on the wrong track when it comes to energy policy.

To get on the right track we must get serious about our energy future.

That’s why API is working to inform voters on important energy issues …

… and encouraging them to make energy a ballot box issue in 2012.

Through the Vote 4 Energy campaign, we have outlined our vision for a future …

… where people and the economy benefit with hundreds of thousands of new jobs …

… increased investment in America …

… and billions in new revenues for government while bolstering national security.

We must abandon policies driven by a zero-sum game for energy: …

… a philosophy that says we must have less oil and natural gas so that we can have more of something else.

We must resist those who would pit one resource against another.

The EIA predicts we’ll need 16 percent more energy of all types to meet our nation’s projected demand in 2035.

We have the resources to meet our energy challenges …

… and with the right leadership and vision …

… we can turn these present-day challenges into future opportunities …

… that will make our country and our economy stronger for generations to come.

I look forward to working with all of you to make that vision a reality.

Thank you.

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