Time to Energize the Economy

Mark Green
Posted January 8, 2014

During Tuesday’s State of American Energy address, API President and CEO Jack Gerard sketched out a more secure energy future for the United States – based on increased access to domestic oil and natural gas reserves, industry technology and ingenuity and a business/investment climate that allows development to go forward.

Let’s focus on that last part, which is less a request for government to do something than simply asking it to avoid hindering safe and responsible energy development through misguided policies and overreaching regulation.

Gerard said there would be efforts this year to de-politicize the national conversation about energy policy:

“The America’s Energy, America’s Choice campaign sends a message to lawmakers at all levels of government that the time to end the intrusion of extreme political ideology or personal agendas in the energy public policy debate is now, and that the only limits on our nation’s energy potential will be self-imposed by shortsighted, politically motivated energy policy decisions. … The American public and future generations deserve better.”

This is a critical point as America reckons the potential positive impacts of its new-found energy wealth, which saw the U.S. surge to No. 1 in the world in oil and natural gas production in 2013, with domestic oil production exceeding imports for the first time since 1995. We have the oil and natural gas and the ability to produce it that could make our country an energy superpower – a scenario that will be realized unless we block it ourselves. Gerard:

“We need to review all statutes, regulatory activity, and focus on their primary purpose: to safely protect our workforce, to safely protect our environment but to also come to a point of decision to approve these opportunities. I hate to keep talking about the Keystone XL pipeline, but it’s the wrong model. If it takes us five years, if it takes us an extended of period of time, because of political considerations, we will limit our ability to achieve our potential as a nation, and frankly discourage the investment that is lining the shores of this country to come here, to develop these vast resources to put our people to work. … We need to look at all regulations and law to bring about an affirmative final decision on these processes and on these permits."

Policy has consequences. Gerard mentioned the drawn-out review of the Keystone XL pipeline and also the potentially harmful impacts of ethanol mandates in the Renewable Fuel Standard (RFS). A video clip from Gerard’s press conference following Tuesday’s speech:

The RFS is an example of policy that was created when America’s energy narrative was one of scarcity – a narrative made obsolete by our ongoing energy renaissance: rapidly expanding domestic production that has resulted in falling imports. Yet the RFS remains law and with it, potential negative impacts for consumers and the broader economy. Gerard:

“… the oil and natural gas industry supports ethanol and the development of alternative forms of fuel. As many of you know, we are key players in that industry and have been for many years. So we need to look at all forms of energy, that comes back to my earlier comment about low-carbon emitting, zero-carbon emitting technologies. So let me just be clear: We don't oppose alternative fuels, we don't oppose ethanol. We oppose policies that distort the marketplace that attempt to achieve an outcome that they have been unable to achieve, and that's what the Renewable Fuel Standard has done today.”

Some of these same themes were underscored by U.S. Chamber of Commerce President and CEO Thomas Donohue in his State of American Business address on Wednesday. Donohue said increased U.S. energy production can help lift the economy and said the chamber would work to “advance and protect” America’s energy revolution. Donohue:

“Our economy is also benefitting from continued strength in domestic energy production and improvements in trade. Note to the president and Congress: Let business do more of both, and we’ll generate more jobs and income than any government program can deliver. … Yet the progress we’ve made so far has come about largely in spite of national policy rather than because of it. We need to thoughtfully open more federal lands onshore and offshore. And, we must remove and guard against unnecessary restrictions, delays, and regulations. There’s no better example than the Keystone XL pipeline. We have idled American workers and deeply offended our most important ally for the sake of domestic politics.”

Again, as Gerard said Tuesday, the U.S. has a glorious opportunity – if it chooses to put vast American energy wealth to work, generating jobs, economic stimulus and new revenues for government. If we get it right, which means getting policy and regulation right.