Talking Energy Security

Mark Green
Posted August 26, 2013

A couple of highlights from a speech to the American Legion’s 95^th National Convention this weekend by API’s Erik Milito, director of upstream and industry operations:

The “trajectory from (natural gas) imports to exports is just one of the developments marking the emergence of the United States as a global energy superpower. … The United States is now the world’s leading producer of natural gas, and we’re on track to surpass Saudi Arabia as the number one oil producer by 2020.  For the first time in 18 years, we’ll be producing more crude oil than we import. 

And:

“Our growing capacity to reduce foreign imports has profound implications for our nation’s energy security – and our national security. The more oil and natural gas we produce here at home, the less our fuel supply – and prices – will be influenced by the actions of other nations. Increased domestic production creates a buffer against supply disruptions and price volatility caused by turmoil in oil and natural gas producing regions overseas. With the right policies, we can obtain 100 percent of our liquid fuel supply from stable North American sources as soon as 2024, turning that buffer into a bulwark.”

Energy security gets a lot of attention on this blog, and for good reason. The former military members Milito addressed know better than most that America’s safety in the world is connected to the ability to protect key national interests – and there’s none more important than having the energy to run our economy and support our standard of living. Now, as Milito told the legionnaires, because of vast domestic reserves America is poised to take greater control of its energy security future:

• Natural gas production between 2010 and 2012 increased by 10 billion cubic feet per day, a 17 percent increase.
• Domestic oil production is projected to top 8.5 million barrels per day by the end of 2014, compared to about 5 million barrels per day in 2009.

These are dramatic increases in domestic oil and natural gas output, thanks to technological advances – including those in hydraulic fracturing and horizontal drilling – that have unlocked ample reserves of oil and natural gas in shale. What this means is less dependence on imports overall – and greater security in the imports the United States chooses to use, such as those from friend and neighbor Canada. Thus, the North American energy partnership Milito mentioned.

He also talked to the American Legion about economic benefits associated with greater domestic energy development. Our industry supports 9.8 million jobs, according to PwC’s most recent analysis. We have added 600,000 jobs in the past two years. Our industry created jobs at a pace 40 times faster than the broader economy from 2007 to 2012. Milito said increasing exports of liquefied natural gas could create an average of 213,000 new jobs every year for the next 20 years.

Simply put, economic strength is fundamental to America’s security. When our economy is creating jobs, when prosperity is spreading and when we’re producing more goods and services, we’re a stronger at home and in the global marketplace.

That’s the opportunity at hand because of America’s energy renaissance. With increased access to U.S. reserves, onshore and offshore, common-sense regulation and policies that encourage energy investment, we can take greater control of our future. We have the oil and natural gas, we have the technology, we have the expertise. We simply need policies to build on the current forward momentum. It’s a choice we can and should make. Milito:

“The United States is once again an energy superpower – with all the attendant economic and energy security benefits within reach.  Thanks to our abundant natural resources and the technology we’ve developed to access them, we have an opportunity that few nations ever get to control our energy future.  With the right approach, we have the chance to be a dominant player in global energy markets and guarantee our energy security for decades to come.  The benefits for American families, businesses, national security and our long-term energy security demand that we seize this opportunity.”