Jack Gerard holds press conference ahead of President Obama’s State of the Union Address
Jack N. Gerard, API president and CEO
Tuesday, January 12, 2015
Good morning, and thank you for joining our call.
In his final State of the Union address tonight, we’ll hear from President Obama regarding the state of the nation – its people, its economy, its security, its future. And the president will likely outline the administration's achievements and the vision for his final year in office, to secure our nation’s future prosperity. No doubt, jobs, climate and international security will take center stage.
America’s 21st century energy renaissance offers proven solutions for each of these issues. The oil and natural gas industry continues to provide millions of good-paying jobs across the nation and supports approximately $1.2 trillion in U.S. gross domestic product.
Although the current low price environment has spurred painful cuts in the oil and natural gas industry, industries that rely on low-cost energy benefit from resilient production.
On climate, industry innovation is driving technological advances and producing clean-burning natural gas that has led carbon emissions to near 20-year lows. And the nation’s new status as the world’s leading producer of oil and natural gas has hit the reset button on the geopolitics of energy, saving American families and businesses billions in energy costs and enhancing global security by diminishing the influence of less stable oil-producing regions.
The energy revolution has created a proven model to improve the environment while creating jobs and strengthening our national security and lowering consumer costs. And we can achieve it without overregulating.
We believe it’s time for the administration to reexamine its assumptions about energy policy. When the president took office, the U.S. energy renaissance was in its early years, and its impact wasn’t yet clear.
Now we know.
We know the United States can lead the world in both emissions reductions and oil and natural gas production. We know that energy production has been a catalyst, not an obstacle, for U.S. success in reducing emissions.
We know the crucial role strong oil and natural gas production has to play in creating jobs, growing the economy, reducing consumer costs, making American businesses more competitive and making our nation more secure.
If the administration ignores that reality and continues to adhere to last century’s thinking that pits increased energy production against climate goals, important opportunities will be squandered.
Federal policy already hinders production almost every chance it gets. Energy development remains off limits in 87 percent of federally controlled acreage offshore.
The majority of the oil and natural gas production that has done so much to grow our economy and save consumers money has occurred on private and state lands where development does not need permission from the federal government, while on federally controlled land, crude oil production has remained flat and natural gas production has declined – not just due to geology, but in large part to policy.
The same tendency to place ideology over experience is behind the administration’s Clean Power Plan, which ignores the natural gas success story and gives special treatment to wind and solar. By giving preference to intermittent and more costly sources, the policy disadvantages natural gas, the energy source that is already reducing our emissions while providing benefits to consumers.
It’s the same reasoning that led to the rejection of the Keystone XL pipeline in the name of environmental protection even though the State Department concluded after five exhaustive studies that greenhouse gas emissions would be 42 percent higher without the pipeline than with it.
And it’s the same thinking that perpetuates the Renewable Fuel Standard, a policy designed to cut greenhouse gas emissions but actually increases them – forcing the use of a fuel that yields more GHG emissions than gasoline.
Like the recently repealed crude export ban, the RFS is a relic of a time of energy scarcity. One of the program’s primary goals – reducing fuel imports – is being achieved by increased domestic production. Virtually every assumption underpinning the 2007 law has been rendered obsolete by the energy revolution, and continuing to implement the RFS could hurt the economy, damage engines and raise food prices even further. The Washington Post editorial board recently stated “there is no doubt it should be repealed,” and a diverse coalition of environmental groups, anti-hunger organizations and farmers, ranchers, grocers are calling for action.
Over the past year, the oil and gas industry has had to address nearly 100 regulations impacting all aspects of our business. The administration needs to take a close look at them and ask two questions: Are they necessary? And what will the cost be to consumers?
Instead of pursuing a barrage of job-crushing new regulations – many of which are duplicative and unnecessary – President Obama has the opportunity to seize the initiative and embrace policies that recognize the value of the energy resurgence and acknowledge that the goals of environmental progress and energy production are not mutually exclusive.
As I mentioned last week in my State of American Energy address, we call it the U.S. model.
Our model doesn’t stifle American investment with overregulation or a one-size-fits-all approach to federal rulemaking. Instead, it allows for the free market and innovation to thrive. It’s a proven way to improve our environment without sacrificing our economy, billions of revenue to the government, and good paying jobs.
By looking to science and real-world proven results to guide the policy choices during his final year in office, President Obama can ensure that America’s energy resurgence continues to provide economic growth, environmental progress and security benefits.
Let’s allow these market-driven initiatives to continue improving our environment without risking our economy and American jobs.
Let’s continue to lead the world. Let’s have policies that help the U.S. succeed.
With that, I’ll be happy to take any questions you have.