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Jack Gerard speech at 2016 Offshore Technology Conference




Jack Gerard

2016 Offshore Technology Conference

As prepared for delivery on May 3, 2016 

Good afternoon, everyone. Thank you, Lisa, for the introduction. Let me start by acknowledging the obvious:  These are challenging times for the oil and natural gas industry. You know better than anyone  the ups and the downs of our industry.

Today, America’s oil and natural gas industry is undergoing a transformation that, while painful for many in the near-term, has fundamentally reordered the global energy markets and produced the world’s newest energy superpower, the United States of America.

What’s more, the American energy revolution has led to a dramatic reduction in our nation’s greenhouse gas emissions, thanks in large part to record domestic production of natural gas. 

In fact, as the Paris Climate agreement moves forward, the United States is already one-third of the way to the emissions reductions sought by the agreement.   

Specifically, according to EPA’s 2013 greenhouse gas inventory, emissions were 9 percent below 2005 levels. Under the Paris agreement, the United States is expected to cut its carbon emission levels between 26 percent and 28 percent below 2005 levels by 2025

And America’s 21st century energy revolution provides consumers with abundant, affordable and reliable domestically produced energy and our allies with a stable and secure source for the energy they need.

Thanks to your hard work and dedication to responsible environmental stewardship across the nation, gone are the days of domestic scarcity and dependence on foreign supplies to meet our energy needs. You are a daily reminder to all that safety has been and will continue to be a core value of the oil and natural gas industry. And you reinforce the power, value and necessity of science, engineering, real-world experience and collaboration between all stakeholders.

That said, now I want to take a step back from the “where we are today,” to spend a few minutes on what made that rise possible: our industry’s ongoing commitment to innovation that continues to reduce the risk in offshore operations.

Because our nation’s rise to global energy leadership didn’t happen by accident or in a vacuum; America’s energy revolution is the culmination of years of investment and dedication to safe, efficient and productive energy development  on and offshore.

Your work to ensure that, day after day, year after year, our nation’s offshore energy resources are brought to market safely, efficiently and responsibly serves as daily affirmation of the larger commitment of the oil and natural gas industry to being the best stewards possible of our nation’s natural resources, which is fundamental  to our industry’s social license to operate.

Every day you and your colleagues uphold the highest standards of professional conduct and professionalism. And by doing, that you earn the public and regulators’ confidence that our industry can operate safely, responsibly and efficiently, even in some of the harshest and most unforgiving environments on our planet, to produce the energy the nation and the world needs.   

The fact is, offshore production is an important part of our nation’s total energy resource portfolio. EIA estimates that offshore energy resources account for about 1.4 million barrels of oil production, and make up about 16 percent of our nation’s total energy production. As we move forward, we must work to ensure that we have a regulatory system for U.S. offshore energy development that promotes the safe and responsible development of our nation’s enormous energy resources and America’s role as a global energy leader.

For the last six years, following the Macondo accident, our industry has continued to review, improve and add to the ever-growing body of knowledge of industry best practices and lessons learned, which continues to deliver significant improvements in spill prevention, subsea containment and response containment, response capabilities and safety management.

Since 2010, more than 100 exploration and production industry standards were strengthened or enhanced, including standards for safety and environmental management, well design, blowout prevention and spill response. And today, our industry can rapidly deploy the most advanced subsea well containment technology available.

These advances not only play an important role in the American energy revolution, but also keep our industry’s social license to operate above reproach. 

For API’s part, our goal is to develop and distribute standards that incorporate industry-wide lessons learned and best practices that reinforce the public’s confidence and ensure that the various regulatory bodies continue to work with our industry to improve safety and access to our nation’s enormous energy resources.

As you may know, the American Petroleum Institute was founded, not as an advocacy organization, but to bring consistency and reliability to the nation’s fuel supply through standardization during the infancy of our industry.

From API’s first standard published almost a century ago in 1924 to the most recent standards, our focus continues to be on using real world data, the best science available and proven engineering practices to develop energy resources safely.

Today API’s standards are developed under an American National Standards Institute accredited process, the most rigorous standard-setting process in place today. The API model includes more than 7,000 volunteer subject matter experts from more than 2,000 individual organizations. And to ensure the broadest reach of these standards, we distribute more than 300,000 copies of API standards worldwide.

Of the current 685 standards, 275 are related to exploration and production operations. And, of those, the 130 are referenced by the federal government and 217 are referenced by state governments. API standards are the most widely cited standards by international regulators of oil and natural gas development, production, distribution, transportation and storage.

In fact, one of the chief regulators of offshore operations, the Bureau of Safety and Environmental Enforcement, references more than 88 API standards, and six more have been proposed for incorporation.

But the industry’s commitment to improving the safety of offshore operations goes beyond setting globally accredited standards. To advance the industry’s understanding and to develop and put into practice the best risk reduction technologies available right now and far into the future the industry leads and funds Center for Offshore Safety.

The center has become an important leader in the global effort to reduce the risk of offshore energy development and provides a unique forum for collaboration between all stakeholders.  

The fundamental mission of the Center for Offshore Safety is to promote continuous improvement to offshore drilling, completions and operations through effective leadership, collaboration, communication, teamwork, disciplined management systems, independent third party auditing and certification and is focused on Safety and Environmental Management Systems or SEMS. 

The center highlights how the oil and natural gas industry chose to go beyond what was required by law  by creating an accreditation process that is more stringent than the regulation. A clear demonstration of  commitment to safe operations and our understanding that  in our profession there was no room for second best.

The center’s leadership role in safety is demonstrated by the fact that it is the only accreditation body that BSEE has approved to accredit SEMS Audit Service Providers. ASPs develop audit protocols, audit guidance documents, and other audit tools that most offshore operators use to conduct the SEMS audits required by regulation. And because of our industry’s expertise, gained through real-world experience based on the best available science, BSEE adopted the center’s more stringent requirements within the SEMS II regulation. 

Yet, in spite of our industry’s record of safe operations and leadership, we have to contend with policies that seem determined to undermine the progress our nation has made to become a global energy leader through rules and regulations that stifle domestic energy production and that do not recognize industry safety leadership and environmental performance.

Fortunately, in addition to science, expertise and the facts we also have the American public on our side, the most important element to our industry’s continued success.

According to a survey conducted by Harris Poll last November, 71 percent of registered voters said they are more likely to support a candidate who supports producing more oil and natural gas. By party affiliation, 64 percent of Democrats and 85 percent of Republicans would support a pro-energy candidate; 79 percent of respondents said they would “support increased production of oil and natural gas resources located here in the U.S.” I think it is safe to say that our industry has the social license to operate from the group that matters the most – the American people.

To harness the power of the public’s support and to spur lawmakers to act in the best interest of our nation’s energy future API has built a network of 35 million voters, from industry employees, to citizens who are committed to a bright US energy future. The network is capable of mobilizing energy industry supporters in all 50 states and 435 congressional districts. The goal of the program is to ensure that our nation gets its energy policy right today, so that America’s status as a global energy leader endures and that consumers continue to benefit from domestically produced, affordable and reliable energy.

Because, without the right energy policy in place today, the gains we’ve made toward American energy security and abundance may not endure.

To that point, last year a study by Wood Mackenzie found that by 2035 pro-development policies could increase U.S. production by approximately 2.8 million barrels of oil and natural gas per day, support 1 million more jobs in the U.S. economy and provide a cumulative $111 billion in revenue to the government.

In the alternative, the study estimates that the combined negative impact of proposed and imposed federal regulations could reduce U.S. energy production by approximately 2.6 million barrels of oil and natural gas per day, reduce jobs supported by the industry in the U.S. by 800,000, reduce revenue to the government by a cumulative $260 billion. 

And that’s the choice voters will have almost exactly six months from today: whether to continue our nation’s 21st century energy revolution or halt and reverse it. The 2016 election will end what has been a raucous, unpredictable and, above all, long presidential campaign, and a new administration and Congress will be tasked with deciding which path our nation should take: energy abundance and security or scarcity and uncertainty.

For the 57th time in our nation’s history, we will vote and elect the next president of the United States, as well as members of Congress, state and local leaders. The collective choices we make this year will play a pivotal role in our nation’s energy future. Because at stake is nothing less than sustained American global energy leadership and with it millions of well-paying jobs, American economic prosperity and national security.

While the outcome of the election is far from certain, it is certain that whichever man or woman becomes the 45th president of the United States, he or she will lead a nation that is first in oil and natural gas production. He or she will have a choice: to continue the trend of American energy abundance, global leadership and domestic economic opportunity or to dismantle the progress we’ve made toward energy security, leadership and abundance.

Our central message to the next president, members of Congress, state and federal regulators is straightforward: Energy is fundamental to our society. Thanks to American innovation and entrepreneurial spirit, the United States is the world’s leading producer of oil and natural gas, an unthinkable development just a few years ago. And if you can’t assist, please don’t hinder our industry’s ability to produce, refine and store the energy our nation and the world needs.

We will remind them that in the last decade we have made tremendous progress when it comes to energy in America. Our view is that we should no longer adopt policies that pull us back toward energy dependency and insecurity.

What we want and what the American people deserve is energy policy that continues our nation’s status as a global energy leader. Future generations deserve nothing less.

Thank you for your time.