Embrace and Harness the U.S. Energy Renaissance

Mark Green
Posted January 13, 2017

As the Trump administration comes into office and the new Congress begins work, a sea-change is needed in the way Washington approaches American oil and natural gas abundance. It’s critically important for consumers, the U.S. economy and our country’s security.

We need policies that embrace and harness America’s energy renaissance instead of trying to restrain it. We need an approach to regulation that manages safe and responsible energy development instead of smothering it in short-sighted, often unnecessary restrictions and red tape. API President and CEO Jack Gerard at this month’s State of American Energy event:

“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. The ongoing American oil and natural gas development and refining renaissance has made it clear that the United States 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.”

Marty Durbin, API executive vice president and chief strategy officer, talked about the need for new approaches – in terms of access to public oil and natural gas reserves, regulation and industry-government collaboration – during a conference call with reporters. During the call, Durbin highlighted a number of ways energy progress has been hindered, blocking benefits to individuals, families and the country as a whole:

Access – The number of onshore drilling permits issued on federal land dropped 47 percent between 2008 and 2015, and oil and natural gas production on federal lands lags behind production rates on private and state lands. Offshore, 94 percent of acreage under federal control is off limits to energy development – up from 87 percent a few months ago, because of the Obama administration’s actions to withdraw tens of millions of acres from consideration for development in the Atlantic and Arctic oceans. Durbin:

“Global energy demand is growing, not shrinking, and access to U.S. energy resources and America’s refining capacity should expand accordingly. Responsible energy exploration – starting with seismic surveying – is essential to supply affordable energy at home and further strengthen U.S. influence in the global energy market while creating jobs. National security is also at stake, particularly in the Arctic, where Russia and China are already active. Military leaders warn that diminished U.S. presence means diminished influence in this geopolitically strategic region.”

New EIA forecast: Fossil fuels (oil, gas, coal) will continue to supply the vast majority of our energy needs -- 79% in 2050 @EnergyTomorrow pic.twitter.com/6FGICfFtxo

— Mark J. Perry (@Mark_J_Perry) January 9, 2017

Durbin mentioned the need for seismic surveying offshore. The Obama administration recently denied six applications to conduct seismic surveying in the Atlantic that would determine the oil and natural gas resource base there. U.S. House Natural Resources Committee Chairman Rob Bishop said the administration’s Bureau of Ocean Energy Management has put American energy in a no-win situation:

“First, Director (Abigail Ross) Hopper told us she doesn’t support leasing until new seismic data is collected. Now she tells us she doesn’t support seismic surveying because she has canceled all the leasing. … Seismic surveys have been conducted safely for decades including in the Atlantic, just look to our Canadian allies – they do it successfully. This permitting process started in 2009. It took eight years just to get rejected, and that’s unacceptable. Any prohibition on safe data collection offshore, even without leasing, is an incredibly poor precedent that should be reversed.”

Accessing onshore energy would be helped by restoring balance to management of America’s public lands, especially in the West. This, and the principle contained in federal law that public lands will be available for multiple uses, including responsible energy development, have been impacted by the Obama administration’s use of the 1906 Antiquities Act to establish national monuments, where energy operations are excluded. API Upstream Group Director Erik Milito, in a letter to Bishop and Senate Energy and Natural Resources Chairman Lisa Murkowski:

Laws, regulations and policies that allow access to federal lands for the responsible development of these energy resources will benefit American families, consumers and businesses with secure sources of affordable energy, hundreds of thousands of well-paying jobs, hundreds of millions of dollars in revenues to the federal treasury, and increased energy security in a challenging world. America’s energy renaissance has strengthened our national security and provides the direct benefit of affordable energy to Americans. The question is not whether the United States has the resources to maintain our position as a world energy leader; the question is whether we have access to develop those resources which result in myriad economic and security benefits. The time is right to implement policies that capitalize on our ample oil and natural gas supplies, not only on federally controlled offshore acreage, but also on lands the federal government controls onshore.

Regulation – Durbin said EPA and other agencies, under the new administration’s leadership, should have a greater recognition and understanding of U.S. success in lowering greenhouse gas emissions. Thanks to increased use of cleaner-burning natural gas, U.S. carbon emissions from electricity generation are at 25-year lows:

Ozone levels and energy-related methane emissions also have declined. Our air is cleaner because gasoline and diesel produced by America’s world-class refineries, used in more fuel-efficient vehicles, have helped lower U.S. air pollutants 70 percent since 1970, even as vehicle miles traveled have increased more than 180 percent.

These are success stories that have done little to slow a federal regulatory onslaught. For example, though ozone declined 17 percent between 2000 and 2015, EPA issued stringent new regulations in 2015 – before the previous regulations were even fully implemented. Similar story on methane regulation. EPA and the Bureau of Land Management are developing new regulations that would impact energy development despite the fact emissions associated with natural gas production declined 14.8 percent from 1990-2014, even as output increased 47 percent. Durbin:

“A smarter regulatory approach based on commonsense, science-based solutions and collaboration can build on industry success without sacrificing jobs or jeopardizing economic, environmental and energy security benefits. … The U.S. energy renaissance has demonstrated that it’s not only possible to balance economic growth and energy security with environmental stewardship, it should be the focus of federal regulatory policy.”

Fuels – The federal Renewable Fuel Standard (RFS) remains broken and in need of congressional action to protect consumers from potential increased costs that could be triggered by unrealistic ethanol volume requirements, as well as potential engine damage caused by using higher ethanol blend fuels in vehicles that weren’t designed for them. Durbin said significantly reforming the RFS should be a top EPA and congressional priority.

To sustain and extend the energy renaissance – for the benefits to Americans, the economy and national security – U.S. energy policy and Washington regulatory approach must keep pace with America’s new energy reality. Durbin:

“The United States leads the world in the production and refining of oil and natural gas, as well as in the reduction of carbon emissions. Federal regulatory policy can either strengthen or weaken the U.S. energy resurgence, with impacts that extend far beyond our sector. The right policies can unleash the potential of oil and natural gas production and refining to create jobs, grow the economy, reduce consumer costs, advance environmental stewardship and strengthen national security. … We are not anti-regulation and are not opposed to smart, commonsense regulation that provides appropriate protections for our workers, the communities in which we operate and the environment.”