The People of America's Oil and Natural Gas Indusry

Greater Access, Greater Security

Mark Green

Mark Green
Posted September 22, 2011

Access = Energy security. Creating jobs and reducing the federal deficit are dominating political discussion in Washington, as they should be. The good news is that pro-development energy policies can provide both. But let's not forget the importance of ensuring safe supplies of energy for the future. Increasing access to American resources now is the key to secure energy tomorrow.

Research by the Wood Mackenzie consulting firm shows that pro-energy development policies could result in an additional 4 million barrels' worth of oil and natural gas by 2020. Using Wood Mackenzie's figures, by 2026 the United States could see 100 percent of its liquid fuel needs met domestically - including contributions from our biofuels sector - and from Canada, chiefly by fully utilizing Canadian oil sands.

Americans have heard over and over that the U.S. imports too much oil (though too few realize our #1 source of imports is Canada). Yet, by enhancing that good partnership with Canada and opening access to federal areas onshore and offshore, our energy future could brighten dramatically. That's what 100 percent would do.

API Chief Economist John Felmy and the Western Energy Alliance's Kathleen Sgamma touched on energy security during a conference call with reporters Thursday. They noted the contrast Wood Mackenzie drew between pro-development strategies and the administration's call for higher energy taxes: 1.1 million additional jobs that could be created by 2020 vs. 48,000 that could be lost; $127 billion in new revenue to government vs. $29 billion lost. And the energy component: 4 million barrels' worth of oil and natural gas added vs. 700,000 barrels lost. Said Sgamma, whose organization represents 400 companies operating in the western U.S.:

"Imposing tax increases hits western producers especially hard, since they already must spend more capital dealing with extra red tape on federal lands. Tax increases will take more capital away from finding and producing energy and will likely render many supply fields in the West non‐economic, particularly for natural gas. ... As we all know, when you tax something more, you get less of it. By further increasing taxes on oil and gas companies, the majority of which are small businesses, the result will be less domestic production."

Felmy pointed to growing economies in Canada and Brazil, where pro-energy development policies are a leading contributor. Growth is occurring in spots in the U.S., he said, but needs to spread:

"North Dakota, for example, has the lowest unemployment in the nation, and its state government is running a surplus. Nationally, the oil and natural gas industry added more than 9,000 jobs to the economy this summer ... at a time when new net job creation fell to zero. But we still fall far short of Canada's and Brazil's commitment to new oil and gas development and taking advantage of our own country's potential. Rich reserves of oil and natural gas remain to be produced in America, and our industry is willing to make the investments to produce them - and spread the success stories we've seen in some states across the nation."

Let's circle back to energy security. Earlier this week the New York Times reported that new discoveries and new technologies are making the Americas the "emerging prize of global energy." Here's what IHS Cambridge Energy Research Associates Chairman and oil historian Daniel Yergin told the Times:

"This is an historic shift that's occurring, recalling the time before World War II when the U.S. and its neighbors in the hemisphere were the world's main source of oil. To some degree, we're going to see a new rebalancing, with the Western Hemisphere moving back to self-sufficiency."

The question is whether the United States will capitalize, whether it will move beyond cheering other countries' decisions to develop their resources and get busy working to fully develop its own. Felmy:

"The commitment to energy development in Brazil and Canada has been observed by some to be part of a rebalancing of the world's oil and gas power centers. If we join them with our own commitment to developing more of our own energy, we will accelerate this shift and help build an unprecedented security of supply across our hemisphere. No longer will we have to rely so much on energy from unstable parts of the world."

As we've said with great frequency lately, it's all about choice.


Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.