As President Obama was preparing to deliver a major jobs speech to the nation Thursday night, the energy industry weighed in with a study showing more than 1.4 million new jobs, $800 billion in additional Treasury revenue, and 10 million bbls of additional daily oil and natural gas production by 2030 could be added with more flexible federal rules.
The study was prepared for the American Petroleum Institute (API) by Wood Mackenzie.
“Our industry has kept more than nine million Americans employed through some of the toughest economic times in America’s history. This study shows we could provide another 1.4 million jobs, with as many as one million [to be] created in just the next seven years,” said Jack Gerard, API CEO.
“The creation of these jobs is within the president’s control. The policy changes involve actions he can take unilaterally. They do not require a super committee of Congress and they do not require new legislation,” he said. With more flexible energy policies at the federal level, new jobs could be added in every state, the 57-page study said.
If U.S. policy towards energy continues along its current path (current path case), the Scotland-based Wood Mackenzie consulting firm predicts that domestic production will grow at a slow rate to 22.2 MMboe/d in 2030 from 18.5 MMboe/d in 2010. This scenario assumes the continuation of many of the current drilling restrictions, regulatory burdens and the moratorium on shale gas development in New York.
But if the U.S. were to enact policies that encourage domestic oil and gas development, Wood Mackenzie said it expects domestic production to grow 76% to 32.6 million boe/d from 18.5 million boe/d in 2010. The 2030 projection in this scenario — called the development policy case — is about 10 million boe/d more than what was forecast for the current path case.
The development policy case assumes that the drilling moratorium in New York will be lifted to allow development of the Marcellus Shale in that state; permitting will increase in the Gulf of Mexico; regulation of shale resources will remain predominately at the state level; and the Keystone XL and other future Canada-to-U.S. oil pipelines will be approved, according to Wood Mackenzie.
Policies enacted under the development policy case could increase natural gas production to 96.9 Bcf/d by 2030 from 60.1 Bcf/d in 2010, according to Wood Mackenzie. That’s 22.4 Bcf/d more than if the country had remained on its current energy path, it noted.
In addition to the impact on production, more flexible energy policies would lead to the addition of approximately 1 million jobs by 2018 and more than 1.4 million by 2030, and an additional $36 billion to the federal coffers by 2015 and nearly $803 billion by 2030, the study said.
In a related development Wednesday, a coalition of 17 industry groups called on Obama to make “responsible and effective” oil and natural gas exploration in the Gulf of Mexico and elsewhere a “centerpiece of your jobs agenda.”
The coalition letter was in advance of the president’s major address on a new jobs agenda. “One policy initiative that simultaneously creates high-paying jobs and increases revenues into federal coffers would be to improve efficiency and the rate of permitting activity in the Gulf of Mexico to a rate that is commensurate with industry’s ability to invest,” the group said.
“Mr. President, some in your administration dispute the actual rate of permitting in the Gulf of Mexico. However, the rate of approval of exploration plans is down 85%, and the median approval time has slipped from 36 days to 131 days. Rigs are actually leaving the Gulf for greater business certainty in places like Egypt, Congo and Nigeria. We would prefer less dispute over numbers and more action on permits if this situation is to reverse,” said the coalition.
Members of the coalition are Offshore Marine Service Association, Associated Industries of Florida, Louisiana Oil & Gas Association, Industrial Energy Consumers of America, American Association of Petroleum Geologists, Consumer Energy Alliance, International Association of Drilling Contractors, Louisiana Mid-Continent Oil and Gas Association, Gulf Economic Survival Team, National Ocean Industries Association, 60 Plus Association, Shallow Water Energy Security Coalition, Shipbuilders Council of America, Independent Petroleum Association of America, Manufacturers Association of Florida, National Association of Manufacturers and The Fertilizer Institute.
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