Opening statements as prepared for delivery
Press Conference on Local Energy Savings
API President and CEO, Jack Gerard
API Vice President for Regulatory and Economic Policy, Kyle Isakower
Thursday, June 5, 2014
Good morning and thank you for joining our call today.
In just a moment, you will hear from Kyle Isakower, API’s vice president for regulatory and economic policy, regarding a new study on how local school districts, municipalities, and state governments are saving money on their energy bills thanks to the revolution in natural gas production brought about by hydraulic fracturing and horizontal drilling.
But I wanted to take a moment to address some of the current public discussion around energy issues and natural gas, prompted by the EPA’s utility rule on carbon emissions, and to outline some of our concerns with the administration’s approach to energy.
America’s energy revolution has changed the global landscape. We are the number one producer of natural gas and are on course to become the number one producer of oil. Instead of importing liquefied natural gas (LNG) to supply our own power needs, we’re now moving to support our allies overseas as an exporter of LNG and possibly even crude oil.
The administration recognizes this success and has been vocal in its support for natural gas. But the administration’s public commitment to natural gas and embrace of our industry’s economic and environmental benefits stands in stark contrast to their broader energy policy.
Just last week, the White House issued a report titled, “The all-of-the-above energy strategy as a path to sustainable economic growth.”
In its report, the administration took credit for the jobs created by unconventional energy and celebrated the fact that net petroleum imports have been reduced by more than half since 2005.
What they didn’t report was that oil and natural gas production on federally-controlled territory fell substantially from 2009 to 2013, according to the Congressional Research Service.
And now, the BLM is hard at work on new regulations that would further discourage unconventional oil and natural gas development on federal lands.
The same is true at the EPA. This week, we saw an EPA proposal that hinges completely on the successful development and deployment of American natural gas to continue reducing carbon emissions -- just as the private market has been doing for years without federal mandates.
Yet, right now, both the EPA and its Inspector General are developing separate, taxpayer-funded reports to justify ever-tighter restrictions on natural gas production from hydraulic fracturing.
At the DOE, regulators continue to slow walk permits to export liquefied natural gas to our allies around the world. And now, they are creating a new process that may or may not slow permits and thereby dampen investment and economic development.
These needless delays stand in direct opposition to the administration’s assertion that climate change requires a global solution, which would benefit from other countries making the switch to clean-burning natural gas. A report by ICF International estimates that America’s LNG exports could result in a full-lifecycle emissions reduction of 43 to 52 percent overseas.
All told, at least twelve different agencies are involved in some form of review or rulemaking that could adversely impact the use of hydraulic fracturing, on which most of our current and future energy supplies depend.
And yet, contrary to its actions, the administration continues to lay claim to the benefits created America’s energy revolution. As we saw this week, the EPA’s utility rule was met with tepid applause by some in the environmental community, precisely because it does hinge on a greater role for natural gas.
Their preferred energy platform is wind or solar or – in some corners – less energy overall. Beyond Coal, Beyond Oil, Beyond Natural Gas is beyond common sense, in our view and in most Americans’ views.
In fact, polling shows that 91 percent of American voters support increased production of U.S. oil and natural gas.
For those who believe in an all-of-the-above strategy, our recent achievements as a nation – both in terms of growth and energy security – are a welcome signal that we can continue to make environmental progress without damaging the economy.
Today, carbon emissions are down to near 20-years lows. Independent research confirms that consumers are savings billions on energy costs due to hydraulic fracturing. And over two million Americans have jobs supported by innovative, unconventional oil and natural gas development.
But to achieve our full potential as an energy superpower, Washington must turn aside these efforts that would impose duplicative regulations on shale development, hold back job creation, and limit access to domestic resources.
A truly all-of-the-above strategy from this administration must embrace all forms of energy and help us to harness the full job-creating power of America’s bountiful resources and technological innovation.
And, as we can see in today’s report, the proven benefits for students, taxpayers, and energy consumers are substantial.
Now, I’d like to turn things over to Kyle Isakower, who will provide more details on today’s report.
Thank you, Jack. And thank you again to everyone for participating in today’s briefing.
Our new analysis, conducted by IHS Global Insight, provides a state-by-state look at how much public school districts and non-federal governments have reduced electricity and natural gas costs thanks to America’s shale energy revolution.
As you are aware, America is now the number one producer of natural gas in the world.
In large part, America’s rise as an energy superpower has been the direct result of technological innovation, particularly in the area of unconventional oil and natural gas production. These are resources unlocked from shale deposits and other tight formations using hydraulic fracturing and horizontal drilling.
Last year, a related report by IHS estimated that the full unconventional value chain supported over two million jobs in 2012 and is projected to support nearly 4 million jobs by 2025. For the average U.S. household, the increase in disposable income resulting from new production totaled $1,200 in 2012 – a total expected to grow to $3,500 in 2025.
But that only scratches the surface of the economic benefits we’re seeing at the state and local level.
According to IHS’s latest analysis, U.S. public school districts saved about $1.2 billion dollars on energy last year, enough to employ over 14,200 teachers.
During the same period, state and local taxpayers saved another $720 million on other energy spending at state agencies, municipal governments, and county offices – the approximate cost to employ about 11,000 government workers.
Today’s report shows that for cities and schools still struggling with the ripple effects of a recession, the economic benefits resulting from new advances in U.S. energy production are making a huge difference.
Higher energy production has helped to push down the cost of keeping our students warm and local governments running. And it has given local taxpayers the freedom to set aside more funding for education and local services, like housing and safety.
In total, during the 2012-2013 fiscal year, U.S. public elementary and secondary school districts saved over nine percent on electricity and over 21 percent on natural gas. State and local governments also saved over 9 percent on electricity and nearly 22 percent on natural gas.
The study also estimated savings for individual states and regions.
For example, unconventional oil and natural gas production saved Colorado schools approximately 9.5 percent on energy last year, according to IHS. The result was over $11 million in savings, enough to employ more than 150 teachers. Taxpayers saved another $6.6 million on energy for other state and local government functions.
On a regional basis, the greatest savings were observed in the Middle Atlantic region, encompassing New Jersey, New York, and Pennsylvania. In that area, schools and local taxpayers saved over 14 percent on their energy bills, due in part to the cold climate and access to affordable natural gas.
But for nearly every region of the country, total natural gas and electricity savings exceeded 10 percent, with a combined savings for U.S. schools, states, and local governments of nearly $2 billion.
And, as Mr. Gerard pointed out, if we get our energy policy right today, this could be just the beginning.
Now, both Jack and I would be happy to take your questions.