As prepared for delivery
Press briefing teleconference on energy revolution and energy policy
Jack Gerard, API president and CEO
March 5, 2013
Good morning, everyone. Thanks for calling in.
Tomorrow, I’ll be in Houston to give a presentation at CERAWeek, which will highlight how the oil and natural gas industry stands ready to lead America’s energy renaissance.
Just as CERAWeek begins in Houston we are in the midst of an “energy week,” here in Washington with several important developments that could have long-term implications for our nation’s energy policy. Specifically, I’m referring to the nominations of Ernest Moniz to be the next secretary of energy, Gina McCarthy to lead the Environmental Protection Agency, Sylvia Mathews Burwell to head the Office of Management and Budget and Sally Jewel’s nomination hearing to head the Department of Interior, which begins in two days.
These appointments will have a major impact on the game-changing opportunity in the energy sector underway, thanks to innovations in hydraulic fracturing and horizontal drilling. These two technologies have unlocked both natural gas and oil from shale formations in quantities that would have been unimaginable just a few short years ago.
To give you an idea of the scope of this new found abundance, the National Petroleum Council, just a decade ago, estimated total remaining natural gas resources in the contiguous 48 states at just over 1,100 Tcf, or about 45 years at current consumption rates. Last year, the firm ICF International estimated total remaining natural gas resource at over 3,500 Tcf, which equates to more than 140 years of our consumption.
Nearly the entire rise was from increased resource estimates from shale and other tight formations. And by the way, the 3,500 Tcf figure is conservative. It assumes current technology and only includes currently identified formations today. And, there are other studies that show even more supply.
The ICF study also projected that these new technologies could lead to an increase of six Tcf per year of natural gas production by 2017, a volume that is more than twice the natural gas consumption of California. The study also showed that by 2017, we could increase our production of oil and other petroleum liquids by 630 million barrels per year. That is more than the current production in the Gulf of Mexico.
These gains in oil and natural gas production will create thousands of new jobs, and help spur economic growth for a generation. Estimates of GDP increases range from $167 to $245 billion in 2017, which is equal to 1.2 to almost 2 percent of current U.S. GDP. Increased production in the oil and natural gas upstream and midstream sectors alone could create more than 300 thousand jobs.
But this could be just the beginning, if we get our energy policy right today, and, again, that’s why the president’s recent choices to lead key departments and agencies – Energy, Interior, EPA and OMB – are so critical.
We need energy policy leaders who will pursue sensible energy policies and will let science guide their decisions, not political ideology. And this becomes a problem when looking at the stark difference between the rate of new energy development on private and state lands versus federal land.
So far, most of the shale energy revolution has occurred on private and state-controlled, not federal land where almost 90 percent is off limits.
According to the Department of the Interior, from 2008 to 2011, both the number of drilling permits issued, and the number of wells drilled on federally-controlled onshore land have dropped over 35 percent. And though the 2012 data isn’t available, there’s very little reason to believe those numbers won’t continue to decline. That must change if we are to fully realize our energy potential.
At a time of slow economic growth, high unemployment, ever-increasing deficits, and the daunting challenge of funding growing entitlements, oil and natural gas development is a “can’t miss” opportunity that could help grow our economy and provide thousands of good-paying jobs. What’s more, we need leaders in Washington that understand that. And, in the President’s State of the Union address, he made the commitment to do more to speed up permitting on federal lands.
To that end, API continues to work with elected officials to try and get our energy policy right. To keep them focused on the facts we are also continuing our robust advertising and public advocacy campaigns as well as working closely with our grassroots organizations—which are 15 million strong and growing—to bring their energy and talent into the discussion.
And we continue to push against misguided attempts to impose punitive taxes on our industry to score political points rather than to address our nation’s fiscal crisis.
Ultimately, in my view, it would be unforgivable if, based on flawed science or outdated assumptions, this country were to abdicate its responsibility to future generations by missing this opportunity to lead on energy and to put control of our energy future back into our own hands.
Tomorrow, I’ll be in Houston to highlight how America’s oil and natural gas industry will continue to lead our country’s 21st century energy revolution. We believe that most of the public is on our side and that our industry has a critical role to play. The most important task now is to help ensure that more of our policymakers will work with us to help our nation benefit from America’s 21st century energy revolution.
Thank you. And now I’d be happy to take your questions.