API Press Call: Erik Milito's Opening Statement on Offshore Energy Development Economic Studies

API Press Call: Erik Milito's Opening Statement Regarding Offshore Energy Economic Studies

As prepared for delivery

The Economic Impacts of Allowing Access to the OCS for Oil and Natural Gas Development

API Upstream Director Erik Milito

March 9, 2017

The U.S. oil and natural gas industry is a central element of our nation’s economy – supporting over 10.3 million U.S. jobs and $1.3 trillion of the nation’s economy. The U.S. is also the world’s leading oil and natural gas producer – due to advanced technologies that allow us to safely explore across the U.S. – which has enabled America’s recent energy renaissance. Our ability to explore and develop our own resources has allowed us to strengthen both our economy, energy self-sufficiency, and our national security – all key aspects of America’s global standing. This is especially important as other countries – such as China and Russia – race to pursue these same energy opportunities.

As long as the U.S. and world depend on oil and natural gas, it should come from the country with the best environmental oversight, safety measures, use of standards, and consideration for energy development that can co-exist with the environment and other industries: the United States of America. Turning our backs on U.S. energy resources doesn’t help our consumers or families, who benefit every day from the very complex and interconnected global oil and gas market that helps to provide reliable and affordable energy for our homes and cars.

It is important that we both remember the past and look towards the future to continue advancing forward-facing energy policies. Our onshore and offshore energy development policies are no exception. Currently, 94 percent of the federally-controlled offshore acreage is off-limits to energy development. Increasing U.S. access to these areas is crucial to continuing our energy renaissance, while helping consumers, families, businesses through increased U.S. investments, jobs, and state revenues. 

Offshore oil and natural gas operations are safer today than ever before. Advanced technology, safety standards, best practices, and regulations are designed to protect the environment, marine life, and workers - while enabling us to work alongside recreational fishing, tourism, and military activities. Since 2010, more than 100 standards were created or strengthened, including for improved safety and environmental management, well-design, blowout prevention, and spill response to ensure we have the best protections and highest safety measures in place.

As today marks the end of the Bureau of Ocean Energy Management’s (BOEM) public comment period for the Department of the Interior’s (DoI) five-year National OCS Program, it is important to reiterate that the Interior’s plan is a good first step in the right direction of continuing America’s energy renaissance. Today also marks the release of a series of economic studies by Calash and Northern Economics, commissioned by API, to provide independent evaluations of the potential impacts of the development of America’s offshore oil and natural gas resources in the OCS – by region – if the current restrictions were lifted.

Ultimately, the studies confirmed what the oil and natural gas industry has supported over the years – opening the currently restricted OCS areas could increase economic benefits not only specifically to the coastal regions near offshore development, but also nationally as well. This should be welcome news for U.S. consumers and families that are looking for increased jobs, investments in their communities, and energy and national security. While some communities have rightfully expressed safety concerns, the reality is that offshore energy exploration and production is safer than ever before and can be done in concert with other activities and industries.

For the Atlantic OCS development alone, the study projected that Atlantic production could be over 250 thousand barrels of oil equivalent per day within three years of initial production and increase to over 1 million barrels per day of oil equivalent within eight years of initial production.

The study also projected that there could be $260 billion total cumulative spending, $22 billion spent per year by the industry, and nearly 265,000 jobs supported across the nation over a twenty-year period.

There were similar significant economic benefits projected for opening the Pacific OCS, Alaska OCS, and Eastern Gulf of Mexico OCS – all of which are detailed on API’s website.

I want to highlight that an estimated 80 percent of U.S. voters support increased U.S. oil and gas production, and that even with renewable energy growth, government projections indicate that our industry will continue to account for 60 percent of the U.S. energy needs in 2040 – at the same time that worldwide consumption is accelerating. Needless to say, natural gas and oil will be demanded and needed both here in the U.S. and globally for many years to come and part of a smart energy and economy policy stance is to ensure that both traditional energy and renewable energy can work together to provide Americans with the resources they need to continue their current quality of living.

While we applaud the Administration and Congress on passing unprecedented and historic tax reform that will support our energy renaissance, jobs, and world-class infrastructure, it is critical that offshore energy exploration and production continues to move forward in order for the U.S. to harness its full energy potential and to meet U.S. long-term energy needs. As these studies found, opening the OCS will bring economic benefits to local communities across the country for decades to come.

I’m happy to take any questions regarding the studies that API released today or on the importance of offshore energy development to the future of the U.S.