Fruits of the Energy Revolution
Posted May 21, 2015
Consumers have felt some of the fruits of America’s energy revolution, API Chief Economist John Felmy told reporters in a pre-Memorial Day conference call. Felmy noted:
- Drivers are paying about $1 less per gallon of gasoline on average nationwide than they did at this time a year ago, according to AAA.
- Thanks to advanced hydraulic fracturing and horizontal drilling, the U.S. energy resurgence has offset production declines in other parts of the world, which has resulted in a more stable global market for crude oil – and relief at the gas pump.
- The U.S. energy picture currently is characterized by strong domestic supply, moderate demand, increasingly efficient production and a refining sector that’s turning out record amounts of gasoline.
“Government policymakers should not take these things for granted … In order to maintain a robust supply of domestic oil, it is essential that the industry be allowed to affordably and predictably explore for and develop new resources.”
Felmy said policy should focus on access to public energy reserves and timely and predictable pathways companies can take through federal leasing and permitting processes. Also, federal and state governments also should avoid “punitive” tax regimes that could discourage investment and/or cause producers to seek better opportunities elsewhere. Felmy stated:
“The benefits for U.S. consumers – as well as manufacturers, the travel and tourism industry and frankly our entire economy – are hard to overstate. Were it not for the dramatic increase in U.S. oil production in recent years, EIA Director Adam Sieminski noted last year that the price of crude might be as high as $150 per barrel today.”
Again, with the help of surging U.S. energy, the crude oil market is well supplied. Felmy said crude prices have rebounded some over the last few months and while API does not make forecasts, analysts and experts (for example, the latest short-term outlook from the U.S. Energy Information Administration) appear to agree that the market will find a new equilibrium well below the $100-per-barrel mark. That’s significant, with positive potential impacts for U.S. consumers and the U.S. economy.
So it’s imperative for the United States to pursue pro-development energy policies that will ensure the growth of domestic supplies – helping our economy and making the U.S. more secure in the world. The decision is ours, Felmy said:
“Geopolitical turmoil that takes foreign oil supplies offline can be difficult to predict or control, but the U.S. will always have control over how much energy we produce here at home. With the right policies, our energy renaissance can endure for decades and help even more families afford to take a vacation on Memorial Day weekend.”
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.
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