The People of America's Oil and Natural Gas Indusry

The State of the Union and Our New Energy Reality

Mark Green

Mark Green
Posted January 29, 2014

Energy issue positives from President Obama’s State of the Union address Tuesday night:

  • Crediting surging domestic oil and natural gas production for adding jobs, creating economic growth and revitalizing the manufacturing sector.
  • Recognizing that because of domestic output the U.S. “is closer to energy independence than we have been in decades.”
  • Pledging to “slash bureaucracy” and streamline federal permitting for key infrastructure projects with a goal of getting more U.S. construction workers on the job “as fast as possible.”
  • Acknowledging increasing use of natural gas is a significant reason that over the past eight years the U.S. has reduced its total carbon pollution “more than any other nation on Earth.”


Throughout the speech the president emphasized action – to create opportunity to benefit the American people:

“I believe this can be a breakthrough year for America. After five years of grit and determined effort, the United States is better-positioned for the 21st century than any other nation on Earth. The question for everyone in this chamber, running through every decision we make this year, is whether we are going to help or hinder this progress. … Wherever and whenever I can take steps without legislation to expand opportunity for more American families, that's what I'm going to do. … America does not stand still, and neither will I.”

Certainly, the president was on target when he said during the speech that the “best measure of opportunity is access to a good job.” And also when he said that wresting leadership in the global economy of the future will depend on the ability to innovate. The president:

"The America we want for our kids – a rising America where honest work is plentiful and communities are strong; where prosperity is widely shared and opportunity for all lets us go as far as our dreams and toil will take us – none of it is easy. But if we work together; if we summon what is best in us … with our feet planted firmly in today but our eyes cast towards tomorrow, I know it's within our reach.”

These sentiments are laudable – and can be realized by acting on sound policies. If we choose energy, America’s oil and natural gas industry can play a major role in connecting the dots between aspirational goals and realizing those goals.  

Because of the growth in domestic oil and natural gas production, America is on the cusp of a new energy reality – one of abundance compared to the scarcity narrative that was prevalent just a few years ago. The president sounded eager to act Tuesday night to promote greater economic opportunity and prosperity, and our industry supports the objectives of a growing economy that can generate the kind of jobs that lift individuals and families. If he chooses, energy can be the catalyst for achieving a number of these goals that will broadly benefit our country:

Jobs – The oil and natural gas industry supported 9.8 million jobs in 2011, an addition of 600,000 jobs from 2009. With pro-growth energy policies industry could add 1.4 million jobs by 2030. In the manufacturing sector more than 500,000 jobs could be supported by unconventional energy from shale and other sources by 2025. Improvements to U.S. energy infrastructure could support an average of up to 1.15 million jobs per year between 2014 and 2025. By approving the Keystone XL pipeline, which is the president’s decision to make, more than 42,000 jobs would be generated during the project’s construction phase, according to the U.S. State Department.

Infrastructure – Building new energy infrastructure – such as the Keystone XL – and improving other infrastructure could generate $1.14 trillion in capital investments between 2014 and 2025. Such spending is economic fuel, with effects beyond the energy sector itself.

Revenues to government – The oil and natural gas industry already sends an average of $85 million a day to the U.S. Treasury in the form of rents, royalties, fees and income taxes. By acting on pro-energy development policies, more oil and natural gas activity will generate more revenues for government – an estimated $800 billion in additional, cumulative revenue by 2030.

Economic prosperity – The oil and natural gas industry not only is a job creator, it is the creator of well-paying jobs. The average job in the industry’s upstream (pre-refining) segment pays roughly seven times the federal minimum wage. Jobs directly related to refining have an average annual income of more than $111,500. On a household basis, Americans are better off because of the American energy boom. A recent IHS study found that the average U.S. household had $1,200 more in disposable income in 2012 thanks to increased use of unconventional energy – a figure that is projected to rise to $3,500 by 2025.

We could go on, but the point is made. Choosing energy means jobs, economic growth and greater opportunity for individual Americans. The president aspires to these objectives – we all do. It’s a decision of policy that must be followed by action.  

It means flexing America’s energy strength though safe, responsible development and by fending off bad energy policies. The latter includes repealing the broken Renewable Fuel Standard and rejecting energy tax increases, which the president mentioned again Tuesday night – while calling on Congress to work with him to “lower tax rates for businesses that create jobs right here at home.” With all due respect, that’s us.

API President and CEO Jack Gerard:

“The American energy renaissance gives us a unique opportunity to revitalize our economy and become a global energy superpower while helping Americans get back to work. The president has the opportunity to seize this moment by approving the Keystone XL pipeline, opening up new areas for responsible energy development, and pulling back unnecessary and costly new regulations. These pro-growth energy policies would create millions of stable, good paying jobs, which is the American people’s No. 1 priority. If the president is serious about combating income inequality, we must take full advantage of the opportunities in energy that are before us.”   

ABOUT THE AUTHOR

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.