Issues Shaping the State of American Energy, 2014

Mark Green
Posted January 6, 2014

API hosts its annual State of American Energy event on Tuesday at the Newseum in Washington, D.C., and the discussion will focus on choices our country can make to increase energy development, grow jobs and the economy and make us more secure in the world. The event will be streamed live beginning at noon. Join in the conversation on Twitter by using the #SOAE14 hashtag.

The event comes at a time when policymakers are considering important energy issues, some of them framed in recent posts by the National Journal and Politico. At the top of our list of key energy issues:

Keystone XL pipeline

Federal consideration of TransCanada’s application for a cross-border permit passed the five-year mark last fall – which means the Keystone XL could have been built twice in the time the pipeline has been held up by Washington.

Delaying the full Keystone XL has delayed the more than 42,000 jobs that will be generated during the project’s construction phase, according to the U.S. State Department, more than $3 billion in industry spending on construction and materials and more than 800,000 barrels of oil per day from Canada, a safe, reliable source – and with it, increased U.S. energy security.

The Keystone XL has been thoroughly studied and debated. Multiple State Department reviews have found numerous benefits from its construction and operation, with no significant environmental impacts. The project absolutely clears the “national interest” threshold that’s critical as President Obama decides whether to approve it. The Keystone XL enjoys strong public support, demonstrated in a series of poll results, including one this week from Rasmussen showing 56 percent believe the pipeline would be good for the U.S. economy.

The project’s southern leg, the Gulf Coast Pipeline linking the oil hub at Cushing, Okla., with Gulf Coast refineries, is scheduled to begin delivering product on Jan. 22. The full project should be approved so that its broad benefits can begin to be felt, and so that the U.S. can enhance its energy security.

LNG and crude oil exports

Because of vast reserves of shale natural gas, the United States has a golden opportunity to become a leader in the global market for liquefied natural gas (LNG). For this to happen, our government should swiftly approve pending LNG export applications that are needed for U.S. export projects to move forward. Delay risks squandering the United States’ present advantages in shale reserves, hydraulic fracturing/horizontal drilling technology and know-how and investment capacity.

Related is the 1970s-era ban on U.S. crude oil exports. With surging U.S. domestic production, the ban has become obsolete, and some in Washington now are open to reviewing the export prohibition. Allowing U.S. crude exports would help support domestic production and jobs and bring overseas wealth into this country via trade.

Ethanol mandates

While EPA has proposed lowering the amount of ethanol it will require for blending into the U.S. fuel supply this year, Congress still must address the overall Renewable Fuel Standard (RFS), whose mandates could negatively impact consumers and the broader economy.  The RFS is outdated – given falling domestic fuel demand and increasing domestic oil production – and should be repealed.

Hydraulic fracturing regulation

Thanks to abundant shale, fracking technology and safe and responsible development, the U.S. could become an energy superpower – if we choose policies that continue safe operations without needlessly restricting it with new layers of duplicative regulation. That’s the potential risk in hydraulic fracturing regulations now being considered by the Interior Department.

IHS estimates unconventional oil and natural gas, developed with hydraulic fracturing, will support 3.3 million jobs by 2020 and more than $468 billion in annual contributions to GDP. Positive impacts already are being seen. A new study says the oil and natural gas industry had a $14.5 billion impact last year in Texas’ Cline Shale play, supporting more than 21,000 jobs with an estimated $1 billion in worker salaries and benefits.

Natural gas from shale is fueling a renaissance in the U.S. manufacturing and chemicals sectors, which can continue with common-sense regulatory policies, robust industry standards to keep fracking safe and effective.