The People of America's Oil and Natural Gas Indusry

Locking Arms on Energy Infrastructure

Mark Green

Mark Green
Posted May 16, 2016

We kick off “Infrastructure Week 2016,” a seven-day focus on America’s infrastructure needs, sponsored by more than 100 trade associations and business and labor groups, with a conversation API President and CEO Jack Gerard and Sean McGarvey, president of North America’s Building Trades Unions, had last week with reporters covering a range of infrastructure and energy policy issues. Highlights below.

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Gerard and McGarvey framed the infrastructure discussion by pointing out the way new pipelines, pipeline expansions and other projects are needed to harness America’s energy revolution and spread the benefits of the new energy abundance – to consumers, workers, businesses and to the betterment of the environment – to all parts of the country. Gerard:

“Often misunderstood and not talked about as much in the infrastructure realm is the question of energy infrastructure. … In a study a couple of years ago IHS looked at the question of investments in infrastructure just in the energy space and concluded that between essentially 2014 and 2025 there could be as much as $1.14 trillion invested in private capital. So when you look at that in the broader context … this is all private-sector money, all put at risk by the private sector, the taxpayers aren’t involved there.”

More Gerard:

“I think it does two things. No. 1, I think it demonstrates the need for infrastructure in this country, and No. 2 it shows the huge economic opportunity that could be realized – and thus our partnership with Sean and others to put those dollars to work on behalf of the American people.”

McGarvey:

“We’ve come through the recession, we’ve come through in the United States the bitter battle over the federal budget where there just hasn’t been investment in the nation’s public infrastructure. The one steady hand investing was on the private side, gas and oil and petrochemicals, in energy infrastructure, power generation, that’s really kept the construction industry going. …

smaller“There’s this ongoing opportunity with capital that doesn’t have to be looked for under couch cushions and other places … The private sector, it’s ready to be deployed, it’s ready to create jobs with the newest and highest technologies that continue to evolve in the energy sector. It’s going to require a very highly skilled, safe workforce … That’s where the marriage comes together between us in the trade unions, infrastructure and our industry partners who are ready to build that infrastructure.

“You listen to folks who are interested in public policy talk about wage inequity and middle class shrinkage. Let’s identify the industries that pay at the top end of the curve and that happens to be the gas and oil industry and the petrochemical industry. So let’s unleash that. Let’s create those middle class jobs and let’s let that free flow of private capital go into building out the nation’s infrastructure, energy infrastructure, which will in turn create more tax dollars which would enhance our ability to build our public infrastructure.”

Some discussion focused on New York state’s recent rejection of the Constitution natural gas pipeline, which would bring gas from neighboring Pennsylvania into a number of counties in New York’s Southern Tier. Conversation also touched on the processes to regulate and oversee infrastructure construction. McGarvey:

“There’s a consistent (pattern) to just denying any new infrastructure. It greatly aggravates the building trades – (a) because it’s our jobs and (b) not only is it our jobs, we’re rate payers. We’re paying those exorbitant rates for our energy costs, to our families, when we know it could done cheaper if sent over safe, reliable infrastructure put in place to bring down energy costs for everybody.”

Gerard:

“The processes have to have integrity. … You see in some of these instances that they will be more and more politicized, and that’s very unfortunate. Because the reality is that if you look at some of the impacts of the denial of pipelines such as (the Constitution), its greatest impact is on the local consumers. You can’t bring affordable, reliable energy into the area without continuing to pay more for it. The other impacts on that include … job creation. Not only Sean’s people who are building it, but the industries and others that are looking for more reliable energy, but you need infrastructure to bring it to them. … I think we’ve got to get the shrill politics out of it. … There’s a challenge there, and I think we’ve got to get the public involved in there as well.”

smallerCommunicating the benefits of more American energy, delivered by infrastructure, is critically important to meeting today’s challenges. Gerard:

“I think as time goes on and more of these debates occur and more and more of the public is engaged and … they begin to better understand that it’s because of issues like infrastructure you’re going to see the debate moderate and there’s going to be broader support. … There are some who might be deemed professional protesters who travel around in different quarters, employing different tactics to try and obstruct that infrastructure. … We’re hopeful longer term that as this debate becomes joined the general public will rise up and say enough’s enough.”

Industry, labor representatives, businesses and elected officials need to join together to support action on the country’s broad infrastructure needs. Helping consumers is primary. McGarvey:

Right now, for my daughter and the rest of the people that live in New England … I think that getting a gas pipeline network up there to deploy that low-carbon energy and bring down their costs is a huge deal. On the LNG side those big projects need connectivity to export our natural resources and we’re not even talking about the manufacturing side, OK? Big manufacturing facilities, plastics facilities – fertilizer facilities that we haven’t built in the United States in 30 years – will be built if they have access to the cheap, reliable low-carbon fuel stock gas. From the Building Trades (perspective), all of those projects are important. One connects the dot with another which creates another opportunity for private capital being invested by entrepreneurs to build something else that benefits the overall economy and specific communities across the country. They’re all important to us.”

Gerard said the challenges ahead on infrastructure reflect a larger American energy success story, with the United States becoming the world’s No. 1 producer of oil and natural gas – helping the economy, benefiting consumers and allowing the U.S. to lead the world in energy-related carbon emissions reductions through increased use of clean-burning natural gas. Gerard:

“The challenges we’re facing today on infrastructure are good challenges to have. When I say challenges, we need to build more. Why? Because we’re producing so much more gas. The United States, we’re going through an historic moment in our history as it relates to energy. We’re truly becoming the energy superpower. … So a lot of those infrastructure challenges are an outgrowth of a great success story.”

McGarvey said he believes infrastructure consensus will develop:

“At some point I think that reasonable people have to sit down and come up with reasonable solutions that everybody can agree with in a bipartisan way to move the nation’s energy infrastructure forward. … I think the next president of the United States and the next Congress, there’s going to be a realization that there’s a small window for us to maintain our position as the world’s economic superpower, and one of the key cogs for us to be able to do that is really to bring our infrastructure into the 21st century. … We really have to make a concerted effort to really invest in the public infrastructure. I’m confident that the next Congress and the next president of the United States … can come up with a doable, fundable plan that really moves our infrastructure in a big way that we probably haven’t seen maybe since the 50s and 60s when it comes to private infrastructure. It’s got to be done.”

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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.