Investing in All of the Above

Mark Green
Posted September 10, 2013

Let these numbers sink in from a new T2 and Associates study that details the oil and natural gas industry’s investments in technologies to reduce greenhouse gas (GHG) emissions:

• $81 billion – Industry’s investment in GHG mitigation technologies between 2000 and 2012. That’s nearly as much as was invested by all other U.S. industries ($91 billion) and more than the government’s investment over the same period (almost $80 billion).

• 53.6 million metric tons – Industry’s equivalent reduction in CO2 emissions between 2011 and 2012 – equal to taking 10.8 million cars off the road. Thanks in part to industry investments, U.S. CO2 emissions are near 20-year lows.

• $11 billion – Industry’s technology investments in domestic wind, solar, geothermal, biomass and other non-hydrocarbon resources between 2011 and 2012 – or one out of every six dollars.

These are significant investments that reflect a couple of important points:

• First, that America’s oil and natural gas industry is a leader in the effort to reduce GHG emissions. Even while our companies are leading a domestic energy renaissance, creating jobs and growing the economy, they’re setting the pace in reducing emissions.

• Second, economic growth – spurred by increased domestic oil and natural gas development – and reducing carbon emissions need not be mutually exclusive.

API President and CEO Jack Gerard discussed the T2 study during a conference call with reporters:

“We are energy companies, and our primary energy is oil and natural gas because that’s the primary fuel we use in this country and around the world. But we should never forget the ongoing investments being made to find that next great breakthrough. We’re major contributors in that, and as this study points out, while we continue to improve our own emissions profile, at the same time we’re providing more and more energy for the nation. … We’re part of the answer. We’re part of the solution, but we can do that at the same time we’re creating jobs and putting our people back to work.”

The study underscores a point related to the ongoing debate over the Renewable Fuel Standard (RFS) and its mandates for ethanol and biofuels: they’re not needed. The private sector, led by the oil and natural gas industry, is investing in those fuels in large numbers. Gerard:

“(The T2 study) shows there is a lot of investment taking place in these areas … and we believe there is an appropriate role for renewable fuels. … The concern we have with the RFS is we don’t think there’s a need for mandates because you can’t mandate technological advancement. You can’t wish that somehow we got that new breakthrough overnight. It has to take place due to the $81 billion being invested by the oil and natural gas industry” and others to find those new technologies.

Gerard also commented on the effort to assign a social cost to carbon to various activities, which is occurring outside regular legislative processes in Congress:

“We believe unilateral regulatory activities without the scrutiny of the broader elected officials are not the way to proceed. … As you look at the oil and natural gas industry, not only are we providing the jobs and the fuel the country consumes, but we’re improving the situation as it relates to greenhouse gas emissions. Today we’re at a 20-year low, about 13 percent lower that we were in 2005. That is a big improvement. It’s a significant shift in where we were just a few years ago. … This conversation not only needs to be robust, it needs to be fact-based, and it should be handled by the Congress, by elected officials to determine how we proceed. It’s too big of an issue to be handled unilaterally by bureaucrats or by one particular way of thinking or philosophy.”