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Jack Gerard's Remarks to the AABE Energy policy Summit

As prepared for delivery

Jack Gerard, API president and CEO
AABE Energy Policy Summit
October 16, 2017

Thank you, Paula, for the introduction and for your leadership and the vital voice you and your team provide on diversity, inclusion and other issues within our industry.

Before moving to my planned remarks, I want to take a moment to address the remarks of Secretary Perry and Commissioner Powelson, each of whom should be commended for their years of public service.

The resilience and reliability of the electric grid are, of course, appropriate issues to consider. But there is simply no evidence to support the disruptive and overly hasty proposal put forward by DOE.

Competitive power markets have brought significant benefits to consumers, improved environmental outcomes and a huge boost to our nation’s manufacturing and industrial sectors.

Natural gas and natural gas generation have been primary drivers for those benefits. Natural gas has earned its market share as a clean, reliable and affordable fuel resource, and by providing essential reliability services valued by grid operators.

We believe all fuels can play a role in a resilient and reliable grid, but we must allow the market to work and to provide appropriate price signals to support the evolution of the grid while maintaining its continuing reliability.

FERC should not be rushed in its deliberations of these important matters and should be allowed to conduct the necessary review in a thoughtful and collaborative manner.

I wanted to take time today to focus on three areas. First America’s energy picture today; second the challenges we face to achieve our vision of America’s energy future and third what we are doing to address those challenges.

In just a few years, thanks to discoveries of abundant energy resources, entrepreneurial spirit and technological innovation and the hard work of many in this room, the United States is the world’s leading producer of natural gas, oil and refined products.

For the first time in generations, the American energy policy discussion is focused on domestic abundance, global leadership, and economic opportunity.

America’s rise to global energy leadership continues to create economic opportunities and well-paying jobs across the country. Direct, indirect and induced employment in our industry has increased by 500,000 in the last few years to a total of 10.3 million. And the industry’s total impact on GDP was $1.3 trillion in 2015, which for context, is larger than the GDP of Spain.

Also, American energy abundance is driving a resurgence in manufacturing. Manufacturers, including producers of steel, chemicals, refined fuels, plastics, fertilizers and numerous consumer products are lower as a result of affordable and abundant domestic natural gas.

America's energy abundance has also meant that the American consumers’ energy costs are lower today. AAA reports that American drivers saved as much as $550 in transportation fuel costs in 2015. And the average American household saved as much as $1337 that same year due to lower utility costs and other energy-related savings.

It is important to note that those consumer savings, in large part, are a result of the increased use of abundant and affordable domestic natural gas, which has also made the nation’s electric grid more reliable.

The increased use of natural gas in electrical power generation has not only enhanced the reliability of the overall system but also provides significant environmental and consumer benefits.

Maintaining long-term reliability and resilience of the nation’s electric grid, at a reasonable cost, should be the primary focuses of any policy, which reason and research tell us can be best achieved by allowing markets to take the lead in determining the fuel mix of the generation portfolio.

Because it is clear that the United States' electric grid will continue to rely on access to all fuel sources, and in that regard, the market has spoken and will continue to speak.

The abundance, affordability, low-emissions profile and flexibility of natural gas and natural gas-fired generating units have made it the fuel of choice. And while there is no question, that our nation’s electric grid will continue to rely on multiple fuels, including natural gas, nuclear, coal, hydro, wind and solar, markets not mandates should determine the generation mix.

The fact is that relying on markets is how the United States became a global energy leader. And it is how we will remain one. Remaining a global energy superpower requires an all-of-the-above approach that is informed by market realities and focused on what’s best for consumers, the economy and the environment.

Beyond the benefits to consumers and manufacturers, the environment is cleaner thanks to the greater use of reliable and affordable domestic natural gas.

In fact, the EPA, greenhouse gas emissions from electricity generation are at their lowest point in 25 years even as electricity demand rises.

And America's best-in-the-world refineries are producing advanced, cleaner gasoline and diesel fuels, which in combination with more fuel-efficient vehicles, has reduced U.S. air pollutants by 70 percent since 1970, even as vehicle miles traveled have increased by more than 170 percent.

The American energy revolution has made clear that it is possible to achieve increased energy production and use, grow the economy and reduce carbon and other emissions because that's today's reality.

The independent, statistical arm of the Energy Department – the Energy Information Administration – reports that natural gas and oil supplied almost two-thirds, 65 percent, of our nation’s energy in 2015.

By 2040 they estimate that oil and natural gas will supply more than 60 percent of U.S. energy needs, even under the most optimistic projections for renewable and other sources.

Globally, IEA estimates that energy consumption will increase 27 percent by 2040, primarily due to expanding economic opportunities in developing nations, and more than three-quarters of global energy demand, 77 percent, will be met by fossil fuels.

I would suggest that we collectively need to do a better job of communicating with those who believe “keeping it in the ground” is protecting our society. Energy development here at home is driving innovation to reduce our environmental footprint and produce energy more cleanly, safely and efficiently than previously thought possible.

Natural gas and oil are at the heart of nearly everything we value on a daily basis – from life-sustaining to life-enhancing products.

To make that connection clear, as you know, earlier this year we launched our latest advertising campaign, Power Past Impossible.

Power Past Impossible is a reminder that from the paint on our walls to the cosmetics and other personal care products to the innovative medical devices that save countless lives and improve the well-being of millions, begin as natural gas and oil.

We want Power Past Impossible to help you start a conversation with friends, family and neighbors to reinforce the connection between natural gas, oil and refined products and our daily lives.

Our efforts are meant to spark the imagination and the interest of the next generation of workers in the oil, natural gas, and refining industry; because if our country is to remain a global energy leader, it will require the tremendous ingenuity, creativity and entrepreneurial spirit and expertise of the next generation.

The fact is that to meet the ever-growing energy needs of our country and the world, we’ll need to address the fact that an estimated 50 percent of the industry’s employee base will retire by the middle of the next decade. We’ll need the talent of everyone, without regard to gender, race, or background.

As many of you know, during my tenure we have made it a priority to better understand the dynamics that influence the number of women and minorities who choose to study science, technology, engineering and math and who ultimately choose a career in our industry.

The industry’s future and its workforce will be shaped, to an increasing degree, by Millennials, the largest and most diverse generation in American history. Forty-two percent of millennials self-identify with a race or ethnicity other than white, about double the share of the Baby Boomer generation at the same age.

More than any other generation, Millennials value and expect diversity in the workplace. An Institute for Public Relations study found that 47 percent of the millennials believe that diversity and inclusion is an important criterion that they actively look for in potential employers.

And we have work to do in order to positively bend the STEM education curve to keep pace with the expected growth in STEM-related employment.

According to the Department of Commerce in 2015, there were 9.0 million STEM workers in the United States, approximately 6.1 percent of all workers, up from 5.5 percent just five years ago. Further, employment in STEM occupations grew much faster than in non-STEM employment ---24.4 versus 4 percent, respectively.

For the past several years, our country has slipped in STEM education relative to other developed nations. According to a report by the Organization for Economic Cooperation and Development, the United States ranked 39 out of 41 developed nations based on the percentage of STEM degrees awarded per capita.

To address the disparity between where we are and where we need to be, API is working in partnership with organizations like AABE, to increase the awareness of our industry in currently underrepresented communities with a focus on STEM education.

Examples include STEM summer camps, innovative district-wide programs, intensive training for prospective and experienced teachers and development of curricula as early as kindergarten, to foster and sustain interest from primary to post-graduate education.

The oil and gas industry is creating labs that introduce students to tools and technology, judging science fairs, supporting summer STEM camps and working a number of groups, including AABE, the Girl Scouts of the USA and Hispanics in Energy.

A valuable tool that tells us where we are and forecasts, where we might be, is the IHS report we commissioned, “Minority and Female Employment in the Oil & Gas and Petrochemical Industries, 2015-2035.”

That report’s most recent update found that in addition to the millions of jobs already supported by the industry, assuming pro-energy development policies are in place, could create nearly 1.9 million direct job opportunities through 2035, to include almost 707,000 job opportunities that are projected to be filled by minorities and more than 290,000 anticipated to be filled by women.

As an industry that currently supports millions of well-paying jobs and is expected to need millions of additional workers, all along the skills continuum, we have a higher stake than most other industries in helping to prepare the next generation with the skills they’ll need to succeed in tomorrow’s economy.

We have a once in a lifetime opportunity to find solutions for many of today's most pressing issues, including creating well-paying middle-class sustaining jobs, tackling income inequality, ensuring sustained affordable energy for consumers and enhancing our national security while continuing environmental progress.

Future generations are looking to us to get America’s energy policy right, today. They are counting on us to leave them a country that is second-to-none in energy production, security, economic prosperity and environmental protection so that they can power past what today we may consider impossible.

Thank you for your time.