U.S. Energy – It’s All About Supply
Posted May 19, 2015
Solid bipartisan support for important energy legislation is on display in the U.S. Senate, with members of a key committee considering a number of ways to increase access to domestic supplies of oil and natural gas – as well as bills ending 1970s-era restrictions on U.S. crude oil exports.
Energy security is about having secure, reliable energy supplies to fuel broad economic expansion and create opportunity for individual Americans. When we remove outdated export restrictions, allowing U.S. energy to reach global markets, studies have detailed how domestic production will be stimulated – again, creating jobs and economic growth here at home. API Executive Vice President Louis Finkel talks about new legislation offered by Democrat Heidi Heitkamp, similar to legislation offered last week by Republican Lisa Murkowski, that would lift the crude export ban and boost U.S. energy:
“Bipartisan leadership on this issue keeps the focus on the consumers and workers that will benefit from free trade in crude oil. … Study after study shows that lifting outdated limits on crude exports will allow America to create more jobs, cut the trade deficit, grow the economy, and put downward pressure on fuel costs. Exports will help keep U.S. production strong in a tough market, and they will provide our allies with an important alternative to energy from less friendly regimes.”
Erik Milito, API upstream and industry operations group director, outlined the compelling arguments for policies that increase access to domestic energy, onshore and offshore, and U.S. energy exports during a Senate Energy and Natural Resources Committee hearing.
Milito said the United States has reached energy superpower status – increasing its daily oil production from 5 million barrels in 2008 to more than 9 million barrels today – through “American ingenuity and engineering prowess.” Because of that the U.S. needs a comprehensive energy strategy going forward that’s based on “competition in the marketplace and state-of-the-art technology.” Milito:
“Our nation can and should be producing more of the oil and natural gas Americans need here at home. This would strengthen our energy security and help put downward pressure on prices while also providing many thousands of new jobs for Americans and billions of dollars in additional revenue for our government. … (W)e are reducing the amount of oil that we import. But we can and should do more.”
The United States is benefiting from its energy renaissance. Energy is driving billions in economy-powering capital investments, creating well-paying jobs, improving our balance of trade and enhancing the security of America and its allies around the world. U.S. energy has helped global energy markets weather unplanned supply disruptions in 2013 and last year. Milito:
“U.S. production growth has made all the difference. It has largely offset the loss from unplanned production outages around the world and put downward pressure on prices to the great benefit of American consumers and businesses.”
A chart Milito furnished for the committee illustrates:
Future planning is critical, Milito said. Policy decisions made now affect energy production years down the road. The soundest policy, he said, is to ensure safe, responsible development at home. Access to reserves is critical. For example, Washington has made about 87 percent of the outer continental shelf off-limits to energy development. Production of oil and natural gas has decreased in areas under federal control, he said. Dramatic increases are occurring on state and private lands. His chart:
Access equals supply, and supply matters – to domestic production, global markets and U.S. security in the world. This is seen in another of Milito’s charts, showing the future of global energy demand:
“Fundamentally, the more oil and natural gas that the U.S. produces here at home, the less the U.S. and the rest of the world need to buy from unfriendly regimes that often use energy as a political weapon. … The energy renaissance has put the U.S. in a better geopolitical position than few could ever have imagined. Increased U.S. production alone is having a significant impact on the balance of global power. By opening up its borders to the free trade of oil and natural gas, the U.S. could have an even greater impact, and we would be responding directly and positively to the pleas of our allies.”
It will be interesting to see energy legislation move through the legislative process. There is bipartisanship behind initiatives that will enhance access and bring U.S. energy export policy into the 21st century, as more and more policymakers recognize we need actions that acknowledge the reality of America’s energy revolution. Milito:
“ … what is needed today are policy choices to increase, not decrease, energy production. Barriers to oil and natural gas production only contribute to volatile energy prices, slower economic growth, and lost American jobs.”
About The Author
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Previously, Mark was a reporter, copy editor and sports editor at an assortment of newspapers. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela have two grown children and six grandchildren.