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Erik Milito's remarks at press briefing teleconference on access

As prepared for delivery

Press briefing teleconference on access
Erik Milito, API group director for upstream and industry operations
Wednesday, March 27, 2013

Opening statement:

Good morning everyone. Thanks for calling in.

The recently passed House and Senate budgets are encouraging from a national energy policy perspective. Why? Because they contain provisions that seek to develop more of America’s vast energy resources, and more important, because they indicate many Members of Congress understand the importance of increased oil and natural gas resources to our country’s long-term energy security and economic future.

As the president prepares to release his budget in the coming weeks we hope that he, too, demonstrates a willingness to lead and to implement energy policies that create jobs and grow America’s struggling economy.

We hope the president will take actions to match the “all-of-the-above” energy strategy that was a central theme in his re-election campaign. We’ve heard rhetorical support for oil and natural gas, but it will take the right policies to meet the administration’s own projections that show oil and natural gas will be critical to meeting America’s energy needs for decades to come.

It was disappointing that the president’s proposal for a new Energy Security Trust Fund will not allow for oil and natural gas development in new areas to help fund the trust. The money would come from existing oil and natural gas revenues, which are now used to support other programs. This is inconsistent with the recent report issued by Securing America’s Future Energy – or SAFE – which specifically recommends expanded drilling because it will generate significant additional revenues AND because it will provide additional production of U.S. oil supplies.

And last week the administration announced it was sharply reducing the amount of acreage in Colorado, Wyoming and Utah available to oil shale research projects. Limiting these projects threatens to delay the search for economic ways to develop oil shale. We need to encourage development of technologies that can produce these resources and help provide a long-term path to energy security.

We need our leaders to ensure that oil and natural gas development is not just tolerated but encouraged. Unfortunately, in federal areas where the administration controls development, production over the 2009-through-2012 period has been down, 6 percent for oil and 21 percent for natural gas, according to a recently issued report from the Congressional Research Service.

In contrast, on private and state lands, where development does not need permission from the federal government, oil production is up 31 percent and natural gas production is up 25 percent.

This performance may suggest that the positives of the oil and natural gas energy revolution now underway in our nation simply have not been fully appreciated. But the economic and energy security benefits are enormous, and future opportunities are even more impressive.

In places like North Dakota, Texas, and Pennsylvania tens of thousands of new jobs have already been created and revenues to government have been pouring in. And throughout the country, lower natural gas costs generated by the increase in production are benefitting manufacturers and homeowners.

Further, Energy Department statistics tell us total U.S. oil production is surging and that for the first time in 18 years we will be producing more crude oil than we’re importing. We’re already number one in natural gas production around the world and could eclipse Saudi Arabia as number one oil producer in just a few years.

And this is just a beginning. We have more than a century’s worth of natural gas resources – that we know of – right here in the U.S. And a forward-looking program that ensures development and expands opportunities for oil and gas could create more than a million additional new American jobs and generate hundreds of billions more in revenue for government at all levels, while providing large supplies of more affordable and reliable domestically produced energy for our future. This is according to a study by Wood Mackenzie.

The administration should embrace this opportunity. It needs to make a real commitment to safe and responsible access to new oil and natural gas prospects in federal areas, speedier permitting, and more sensible regulations that will both spur new oil and natural gas production and encourage a robust refining industry capable of producing the gasoline, diesel and other fuels that America will be demanding.

We need sound, cost-effective rules – not costly requirements like EPA’s proposed Tier 3 sulfur regulations that would provide little benefit or the unworkable Renewable Fuel Standard which could drive up energy costs and force sale of biofuel blends that are unsafe for millions of American vehicles.

A new, more positive approach to oil and natural gas development could also deliver an additional $800 billion in government revenue by 2030, which could help finance any number of critical programs, including new infrastructure projects.

In fact, last week’s $1.2 billion Gulf of Mexico lease sale generated more than half the revenue that the president’s Energy Security Trust proposal calls for over a decade.

This is a far better approach than hiking taxes on the industry, which would generate revenue in the very short term, but after only a handful of years would result in declining revenues because some prospective new oil and natural gas investment and development would become uneconomic and move overseas.

The president also needs to approve the Keystone XL pipeline, which the public overwhelmingly supports and which would pay off immediately in thousands of new jobs – and quickly move to approval of applications to export LNG, which multiple studies conclude would create jobs and generate revenue.

Oil and natural gas present a valuable opportunity to the nation. Now is the time for presidential leadership, and we urge President Obama to support an American energy policy that takes advantage of this opportunity – that will spur growth in jobs, generate more revenue, and add to our long-term energy security by providing reliable, affordable supplies of energy for generations to come.
  • Access
  • Jobs
  • Keystone XL
  • LNG
  • Erik Milito
  • Taxes