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Marty Durbin's remarks at press call on confirmation hearings on energy




As prepared for delivery

Press call statement
Marty Durbin, Executive Vice President and Chief Strategy Officer
American Petroleum Institute
Confirmation Hearings
January 13, 2017


Good morning, and thank you for joining me today to discuss API’s perspective on next week's confirmation hearings.

The next leaders of Interior, Energy and the EPA will take office during a historic era of American energy abundance. The United States leads the world in the production and refining of oil and natural gas, as well as in the reduction of carbon emissions. Federal regulatory policy can either strengthen or weaken the U.S. energy resurgence, with impacts that extend far beyond our sector. The right policies can unleash the potential of oil and natural gas production and refining to create jobs, grow the economy, reduce consumer costs, advance environmental stewardship and strengthen national security. These five pillars should guide consideration of the nominees, and the energy policy discussion.

The oil and natural gas industry is committed to safety and to responsible operations.  As a reminder, API is a standards-setting organization – accredited by the American National Standards Institute – establishing safety and operational standards that are in use globally.  Nearly 400 API standards are cited throughout federal and state regulations.  We are not anti-regulation and are not opposed to smart, commonsense regulation that provides appropriate protections for our workers, the communities in which we operate and the environment.  We look forward to continuing collaborative efforts to ensure U.S. oil and natural gas operations remain the world’s gold standard.

In the Department of Interior, progress can begin with a commitment to expand, not reduce, access to America's valuable natural resources. Onshore, the number of drilling permits issued on federal land dropped 47 percent between 2008 and 2015, and production of oil and natural gas on federal land lags far behind production rates on private and state lands. Offshore, fully 94 percent of federal acreage is now off limits to energy exploration -- up from 87 percent a few months ago, due to recent actions to restrict even more areas in the Atlantic and Arctic oceans. Global energy demand is growing, not shrinking, and access to U.S. energy resources and America’s refining capacity should expand accordingly. Responsible energy exploration – starting with seismic surveying – is essential to supply affordable energy at home and further strengthen U.S. influence in the global energy market while creating jobs. National security is also at stake, particularly in the Arctic, where Russia and China are already active. Military leaders warn that diminished U.S. presence means diminished influence in this geopolitically strategic region.

A focus on national security and job creation should also guide the Department of Energy’s approach to exports of liquefied natural gas (LNG). The United States leads the world in natural gas production, and streamlining the export approval process will ensure we make the most of our competitive advantage. LNG exports could contribute up to 452,000 jobs nationwide by 2035 -- without compromising domestic affordability -- while enhancing security for European allies seeking to break their dependence on less reliable energy supplies. LNG exports can also help reduce global greenhouse gas emissions the same way clean-burning natural gas has reduced emissions stateside.

At the Environmental Protection Agency, greater recognition -- and understanding -- of U.S. success in reducing greenhouse gas emissions is a must. Carbon emissions in the power sector are at 25-year lows due to greater use of clean-burning natural gas. Ozone levels and energy-related methane emissions have also declined. Cleaner gasoline and diesel fuels produced by America’s world class refineries, in combination with more fuel-efficient vehicles, have contributed to a 70 percent reduction in U.S. air pollutants since 1970, even as vehicle miles travelled have increased by more than 180 percent.

In every case, market forces, technological innovations and strong industry standards are leading the way. Our concern is that recent proposals ignore this market-based progress and sometimes the agency’s own science in favor of top-down government mandates that threaten to undermine U.S. energy production and raise consumer costs. In the case of ozone emissions, which declined by 17 percent between 2000 and 2015, the EPA issued stringent new regulations in 2015 before the previous regulations had been fully implemented, saddling state agencies and local economies with the obligation to develop two different but concurrent ozone programs. The latest ozone standards, which approach background levels in many areas, could place even rural, undeveloped areas out of compliance and could place new restrictions on virtually any economic activity. New methane regulations follow the same pattern. Methane emissions associated with the natural gas industry declined by 14.8 percent from 1990-2014 even while natural gas production increased by 47 percent. Producers already prioritize capturing methane for delivery to consumers to heat homes and generate clean-burning electricity, and industry innovation and continuous commitment to emission reductions have achieved results. As you know, EPA and the Bureau of Land Management are developing new regulations, despite the obvious concern that implementing two sets of regulations from two different agencies on the same issue practically guarantees duplicative, potentially costly overlap.

A smarter regulatory approach based on commonsense, science-based solutions and collaboration can build on industry success without sacrificing jobs or jeopardizing economic, environmental and energy security benefits.

The RFS in particular is well overdue for significant reform. Protecting consumers from engine damage and potential increased costs that unrealistic ethanol volume requirements could trigger should be a top EPA and congressional priority – not adjusting the bureaucratic details of implementing the failed policy, as recent efforts to shift compliance obligations would do.

The U.S. energy renaissance has demonstrated that it’s not only possible to balance economic growth and energy security with environmental stewardship, it should be the focus of federal regulatory policy. We stand ready to work with Congress and the new administration to continue meeting America’s energy needs and expanding global energy and environmental leadership.

Now I’ll be happy to take your questions.