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The U.S. oil and natural gas revolution has delivered so many environmental and economic benefits that it's easy to take the "new energy reality" for granted, but it's time now to lay the groundwork for future energy security, American Petroleum Institute CEO Jack Gerard said Wednesday.
In a keynote address at API's Seventh Annual State of American Energy event, Gerard highlighted the national trade group's 2017 report and discussed the issues expected to shape economic and political news this year. He also made clear that the industry was looking forward to the incoming Trump administration, which is seen as pro-business and fossil fuel friendly.
"We have helped to disprove, conclusively, the long held assumption that leading the world in the production and refining of oil and natural gas is incompatible with an improving environment," he said. "America no longer has to choose between more energy and a cleaner environment. The United States has dramatically increased energy production and use even as emissions continue to decline. We now know oil and natural gas are part of the solution."
According to the U.S. Energy Information Administration, carbon emissions from electricity generation during the first half of 2016 were at their lowest point in 25 years, even as power demand continues to rise, as more consumers switch to natural gas. Thanks in part to the increased use of domestic natural gas, ozone concentrations in the air have dropped by 17% since 2000. U.S. air pollutants also have fallen by 70% since 1970, even as vehicle miles traveled have increased by more than 170%.
The United States has become not only an energy superpower but a global emissions reduction leader, Gerard said.
"Our success was achieved through private sector innovation and investment," he said. "The oil and natural gas industry's innovation in the decades-old technique of hydraulic fracturing, paired with horizontal drilling, is the driving force for the American energy revolution."
Going forward, the industry "stands ready to continue forging solutions that help meet the energy needs of our nation and the world and to work with elected leaders at all levels of government to ensure that the American consumer continues to benefit from affordable and reliable domestic energy."
The API report details many ways that the energy industry, with oil and gas laying the foundation, is essential to society. Fossil fuels will continue to form the foundation for global energy needs far into the future, Gerard said.
"Beyond consumption we continue to make and pursue advancements in energy efficiency. Our global community will need more energy, and oil and natural gas will continue to be the dominant source for decades to come. The only question up for debate is which nations will help meet future energy demand?"
Ongoing U.S. oil and gas development, combined with a renaissance in refining, have "made it clear that the U.S. can help meet that need. But to achieve that goal we need smart pro-growth energy policies that promote safe and responsible energy development and recognize the central role that fossil fuels will play in meeting future energy demand."
API is looking to the GOP-controlled Congress and incoming administration to commit to growing the U.S. energy sector even more.
"We know we need more energy, but we haven’t seen any meaningful expansion of offshore access in decades,” Gerard said. "We know we need to expand energy infrastructure to keep pace with our new energy reality and deliver affordable energy to families and businesses, but government decisions and red tape are obstructing energy infrastructure projects -- and the good jobs they create -- even for projects that have successfully completed exhaustive approval processes."
API, he said, has helped to disprove assumptions that increased energy production, refining and consumption lead to a dirtier environment.
"They don't," Gerard said. "What we know from recent performance is that we no longer have to choose between more energy and a cleaner environment. Our nation has dramatically increased energy production and use even as emissions continue to decline."
The "regulatory onslaught" underway over the past eight years has to be reexamined. Regulations proposed or imposed on the energy industry during the Obama administration included 145 rules and executive actions, according to API. Going forward, work has to be done to "implement smart energy regulations that are focused on the consumer, help to grow our economy, protect workers and continue to improve the environment. It is our view that regulations that do not align with those basic and common-sense goals should be reexamined, revised or removed to make way for smarter and forward-looking energy policies."
For example, "roughly 87% of federal offshore acreage" has been put off limits to energy exploration and development, Gerard said.
"Allowing more offshore oil and natural gas production could create more than 800,000 new jobs, grow our economy by up to $70 billion per year and raise more than $200 billion in cumulative revenue for the government treasury. Restricted offshore areas could hold 50 billion bbl, or more, of oil and more than 195 Tcf of natural gas."
Imagine what the oil and gas industry could do to benefit consumers, the economy and the environment "if more of that energy were available for responsible and safe domestic production," Gerard said. "Just think about how many more people in developing countries could have access to cleaner-burning North American natural gas or benefit from the cleaner-burning fuels produced by American refiners and what this could mean for the environment."
A small but vocal minority also is targeting oil and gas infrastructure to advance an anti-fossil fuel agenda, according to API.
"What they are doing, in reality, is putting themselves, workers and property at risk," Gerard said of protesters. "Longer term, by attempting to constrain private investment in energy infrastructure -- and I want to highlight that's private investment, not taxpayer-funded investment -- they are potentially preventing the creation of millions of well-paying jobs, and promoting, potentially, increased energy costs for millions of their fellow Americans."
Energy infrastructure investments offer short- and long-term job creation, Gerard stressed. API estimated that updating U.S. energy infrastructure could generate up to $1.16 trillion in private capital investment. That level of investment could support by 2025 more than one million jobs and add $120 billion/year to the U.S. economy.
"That's the kind of progress the American people made clear they want to see seven in the months and years ahead from their elected leaders from municipal governments to federal agencies," he said.