Energy Tomorrow Blog
Posted July 20, 2021
Natural gas and oil are the energy foundation for U.S. economic growth, job creation and the opportunity for Americans to prosper all across the country. This is seen in a new analysis of our industry’s economywide and countrywide impacts: 11.3 million jobs supported in 2019 across all 50 states and the District of Columbia – generating 3.5 additional jobs elsewhere in the economy for each direct industry job, accounting for 5.6% of total U.S. employment; supported nearly $1.7 trillion to U.S. gross domestic product, or nearly 8% of the national total; supported nearly $900 billion in labor income or 6.8% of U.S. national labor income.
The analysis by PwC commissioned by API is based on the latest available government data (2019). Like other industry and business sectors, our industry was hard hit by the economic effects of the 2020 pandemic, but the 2019 data – generated during a period of robust U.S. growth, indicates the importance of the natural gas and oil industry post-pandemic, as the U.S. and global economies and petroleum demand ramp up. The U.S. Energy Information Administration projects (EIA) that 2022 global oil and liquid fuels demand will eclipse 2019 levels.
Given EIA’s forecast, it’s critically important that national policy supports – and doesn’t hinder – domestic natural gas and oil production.
Posted July 15, 2021
As we await the Biden administration’s report on the federal natural gas and oil leasing program, let’s note the welcome news that oil and gas permitting approvals this year are on track to reach their highest levels since George W. Bush was president.
Permitting at that pace is good for near-term U.S. production, no question. In January, when the administration suspended new oil and gas leasing on federal lands and waters, it said permitting would continue, and it has. The country benefits from safe, responsible and robust domestic natural gas and oil production.
Americans shouldn’t conflate permitting and leasing. Drilling permits are issued when companies are ready to develop from acreages, onshore and offshore, previously leased from the federal government. Put another way, leases typically are secured years before development occurs. We’re seeing permits go through at a significant rate because investment and planning have been completed and acreages are ready to go into production. Permitting is about production that’s imminent; leases represent energy in the future.
Posted July 12, 2021
There’s a good deal of discussion in Washington about a national clean electricity standard, which would use government mandates to set targets for reducing carbon emissions from the power sector.
Such an approach is one way to go, but there’s another – one that already has achieved significant greenhouse gas emissions by using the power of the marketplace to effect change: U.S. natural gas.
The increased use of natural gas is the leading reason for reduced U.S. emissions in recent years, including carbon dioxide. At the same time, technologies and industry innovation have helped reduce methane emissions associated with natural gas and oil production, and new advances are on the horizon. This pathway leads to a lower-carbon future and the ability to meet growing world demand for energy.
Posted July 8, 2021
The Biden administration says it is keeping a close eye on the OPEC+ talks on crude oil production because, as White House Press Secretary Jen Psaki said, it wants “Americans to have access to affordable and reliable energy at the pump.”
Unfortunately, the U.S. is mostly a spectator as OPEC+ debates crude oil supply, which continues to be outpaced by demand, putting upward pressure on crude costs. Because the cost of crude is the biggest factor in gasoline prices, U.S. pump prices have reflected this mismatch between demand and supply.
Posted July 7, 2021
To serve consumers, support economic growth and help protect the environment, the U.S. needs more natural gas pipeline infrastructure. Last week’s U.S. Supreme Court decision – that states do not have an outsized authority to block federally approved projects from obtaining the land for those pipeline routes – is a significant step forward for those purposes.
The decision underscores the authority of the Federal Energy Regulatory Commission (FERC) under the federal Natural Gas Act (NGA) to review and approve pipeline projects that demonstrate a public necessity and cross state lines, such as the 116-mile PennEast natural gas pipeline from Pennsylvania to New Jersey.
The NGA delegates the federal government’s eminent domain authority to private parties once FERC has approved and certified the pipeline project, which allows those who invest in and build pipelines to have regulatory certainty and a clear permitting process.
Posted June 29, 2021
During a speech to the Houston Economics Club last week, API President and CEO Mike Sommers talked about the United States reaching an “inflection point” in terms of its energy and economic future. Choices made today could have impact far into the future.
As the world’s leading producer of the world’s leading energy – natural gas and oil – the U.S. can choose the market-based approach that over the past decade led to abundant domestic energy, supporting economic growth, reducing reliance on foreign oil and building greater security.
The other choice is the apparent approach of the Biden administration to curtail domestic production of natural gas and oil, swapping their reliability and affordability for aspirational fuels that could take the U.S. back to a period of energy uncertainty.
Posted June 25, 2021
America’s natural gas and oil industry is committed to delivering access to affordable, reliable energy to power modern life and empower emerging economies around the world. At the same time, API supports the ambitions of the Paris climate agreement – our member companies are building a lower-carbon future with cleaner energy options for businesses and consumers.
Over the past decade, our abundant natural gas resources have contributed to meaningful emissions reductions in the U.S. power sector, which has been the primary source of demand growth for the fuel. The availability of low-cost natural gas – and our growing capacity to export liquefied natural gas (LNG) – presents the unique opportunity for America to help nations around the world achieve ambitious Nationally Determined Contributions (NDCs) and carbon-neutral commitments by reducing greenhouse gas emissions while also supporting economic development.
Posted June 16, 2021
Here are three things to consider as President Biden and Russian President Vladimir Putin have their first in-person meeting today in Geneva, Switzerland: Energy is at the heart of Russia's influence and power; new U.S. policies put American energy leadership at risk; and U.S. oil and natural gas should be strengthened, not weakened. ...
There is no question the U.S. relationship with Russia is complicated and will be difficult for years to come. The last thing the U.S. needs is to try to deal with Russia while it is at the same time actively weakening its own energy position. It is an unforced error, an opening that cannot be handed over to formidable adversaries such as Mr. Putin.
Posted June 14, 2021
Among U.S. efforts to address the risks of climate change, the dramatic shift to natural gas to fuel electricity generation stands out over everything else.
That includes renewables, electric vehicles and the seemingly endless target-setting by various bodies. In terms of measurable progress, none of those has reduced greenhouse gas emissions in this country as much as increased use of natural gas for power generation.
The U.S. Energy Information Administration (EIA) reports that over the past 15 years, the shift in power generation fuel to natural gas from coal is largely responsible for 2019 sector carbon dioxide emissions that were 32% lower than those of 2005.
Posted June 9, 2021
Russian President Vladimir Putin’s negative comments last week about fracking – “truly a catastrophic type of production” – and U.S. natural gas are hardly surprising.
Putin has disparaged U.S. hydraulic fracturing before, and we get it: Few heads of state are as threatened by U.S. global energy leadership, built by the fracking/horizontal drilling revolution. Putin’s newest remarks come as Russia nears completion of a new natural gas pipeline, Nord Stream 2, to Germany that will vie with exported U.S. natural gas. It’s all in the marketing, right?
More seriously, the Russian leader’s comments are one among many reminders that energy markets are global, that there’s rigorous competition between energy-producing nations to meet global demand and that domestic natural gas and oil production and the infrastructure to transport it are critically important to our economy, security and way of life.