Oil industry: US to become energy superpower, unless government kills it
Posted By Michael Bastasch On 3:48 PM 01/07/2014
The U.S. is poised to become the world’s largest energy producer thanks to hydraulic fracturing and horizontal drilling, according to the oil and gas industry’s top lobbyist.
That is, if environmentalists and the federal government don’t put a stop to the American energy boom.
American Petroleum Institute president Jack Gerard told an audience at the Newseum in Washington, D.C. on Tuesday that the U.S. needed to get its energy policy right if it wants to be the world’s energy superpower.
“What we want and what the American people deserve is energy policy that continues the trend of our nation becoming energy self-sufficient and a global energy leader,” Gerard said in a speech outlining the oil and gas industry’s agenda for the coming year.
“If we are to continue our nation’s current positive energy production trends, we must implement energy policies based on current reality and our potential as an energy leader, not the outdated political ideology of the professional environmental fringe or political dilettantes,” he added.
The petroleum industry is concerned about infrastructure in the U.S., especially since the Obama administration has been delaying the approval of the Keystone XL pipeline for more than five years.
The oil boom has companies clamoring for ways to get those resources to market, as the existing pipeline infrastructure has been overwhelmed by the huge increases in oil production. Rail and truck have been making up the slack, but there are safety concerns to using more of this type of transportation.
“Broadly, the Keystone XL pipeline debate highlights the need to invest in our nation’s infrastructure today to support job creation, economic growth and increased government revenue,” Gerard said.
Environmentalists have heavily opposed Keystone because they say it will contribute to global warming. However, the State Department found last year that the pipeline would have minimal impact on global warming or the environment.
“Keystone XL is a climate disaster,” said Michael Brune, executive director of the Sierra Club. “The President set a tough climate test for the pipeline, which it clearly fails to pass. There is no wiggle room here, Mr. President.”
Natural gas export terminals have also become a political hot potato as environmentalists try to prevent U.S. natural gas from being sent abroad. Democrats and environmentalists have also opposed allowing crude oil exports, despite the boom in U.S. production.
“When Congress first enacted limits on crude exports in the 1970s following the oil embargo, these laws were designed to enhance American energy security and protect U.S. consumers from volatility and price spikes,” New Jersey Democratic Sen. Robert Menendez wrote to President Obama. “Despite changes in the global energy market, these goals should remain priorities in our nation’s energy policy. Easing this ban might be a win for Big Oil, but it would hurt American consumers.”
However, energy producers aren’t sitting around waiting for government action to invest in oil and gas infrastructure. A study by IHS Global found that “between $85 — $90 billion of direct capital will be allocated toward oil and gas infrastructure in 2014. Between 2014 and 2020, IHS projects that an average of greater than $80 billion will be invested annually in U.S. midstream and downstream petroleum infrastructure.”
“In my view, it would be unforgivable if this country were to abandon or ignore its responsibility to future generations by missing this opportunity based on flawed science, outdated assumptions and political orthodoxy,” Gerard said.