Exporting U.S. oil will help consumers, says top U.S. oil lobbyist, because it will give U.S. producers the chance to compete globally.
Thousands of new gas and oil wells in Ohio and other states have lowered prices, created jobs, reshaped the industry and made the United States a global player in the oil markets, the American Petroleum Institute's CEO Jack Gerard said Tuesday. The API argues that plentiful shale gas has helped lower power plant carbon dioxide emissions and is calling for fewer federal environmental regulations. WASHINGTON -- The nation's oil and gas industry needs less federal regulation, fewer taxes and political recognition that fossil fuels are the foundation of "an American Renaissance," the nation's top oil and gas lobbyist said Tuesday.
Jack Gerard, president and CEO of the American Petroleum Institute, the industry's leading lobbying organization, applauded the recent federal legislation lifting the 40-year-ban on exporting U.S.-produced crude oil, repeatedly slammed the Obama Administration for its environmental initiatives and criticized environmental groups without naming them.
Gerard spoke at a Washington, D.C., luncheon following the API's release of its fifth annual State of Energy Report report, which takes stock of the industry's condition while laying out a broad agenda for the coming year.
Despite the current downturn in the oil and gas industry that has led to the layoff of more than 100,000 workers, the cheapest gasoline in nearly a decade and plummeting natural gas prices, Gerard described the industry as "a dominant global force" that has not only created high-paying jobs but also pumped $1.2 trillion into the U.S. economy.
"America's emergence as a global energy leader has fundamentally re-ordered the world's energy markets, by elevating the importance of North American energy production and reducing what had been the dominant roles of OPEC and Russia," he said.
As evidence, he cited the relative stability of U.S. oil prices despite the current political confrontation between Saudi Arabia and Iran.
A decade ago, oil prices would have spiked because of such a confrontation, he said, because the United States was not a major producer.
But he did not mention the downturn in global demand for oil and the growing global glut of oil, much of it stored in tankers, as Saudi Arabia and other OPEC countries continue to produce more oil than is needed to prop up their oil-based economies at a time when oil prices have decreased.
Claiming that the ascension of U.S. producers has changed world oil markets, he seemed to be arguing that purely environmentally driven policy federal policies without market and geopolitical considerations could lead to a disaster.
"The energy policy decisions we make today will determine whether this nation remains a positive stabilizing force in the world's energy market and whether consumers can continue to count on" its continued growth, he said.
Gerard punctuated his remarks with frequent references to those who would use "ideology" to make decisions about regulating the industry rather than the facts as API sees them.
"The best way forward on energy policy is not through legislative mandate [or] over-reaching regulatory oversight but by using what we call the U.S. Model," he argued, a model that relies on state regulatory oversight in collaboration with the industry.
He cited President Obama's Clean Power Plan as an example of over-reaching and unnecessary regulation.
The plan issued by the U.S. Environmental Protection Agency, calls for states to work with electric utilities to reduce power plant carbon dioxide emissions by 32 percent by 2030 compared to levels back in 2005.
But the industry had already reduced CO2 emissions before the plan was released, Gerard said, by switching from coal to natural gas. Therefore, the new regulation is not needed, he argued, assuming that the utilities switched from coal to gas entirely because of market prices, rather than because they anticipated the new regulations.
Gerard said the president's decision to nix the proposed multi-billion dollar Keystone Pipeline delivering crude from Canada's oil sands to U.S. Gulf Coast refineries as an action driven entirely by ideology and not market considerations.
Even the government conceded that the decision could lead to high CO2 emissions, he said, because the oil would still get to the Gulf Coast, but by rail rather than pipeline.
Though this is a presidential election year and API does not expect to get a lot of legislation through Congress, one policy the industry would like to see eliminated is the Renewable Fuel Standard, first passed in 2005.
The standard requires oil companies to blend increasing amounts of ethanol into gasoline. Gerard called the rule "a relic" of the past before U.S. shale oil production got underway. Continuing or expanding the standard will lead to higher fuel prices and is "a direct threat to our nation's economy," he said.