The State of American Energy: A Summary

8/8/2019 The State of American Energy: A Summary

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1 Te State o American Energy

The State of American Energy: A Summar

Energy’s Role inEconomic Growth,Job Creationand Providingfor the FutureOur energy uture depends on the

ability o America’s energy companiesto saely and reliably provide the oiland natural gas the United Statesneeds to grow the economy, create

jobs and enhance energy security.

It is time or a new ocus on energy policy, and we remain committedto working with all policymakers toidentiy solutions that will advanceour country’s economic interests andsustain our way o lie.

Safely Providing America’s EnergyTe U.S. oil and natural gasindustry has always had a strong saety perormance record, and wecontinue to improve upon it.

Following the Gul oil spill, our

industry demonstrated its commit-ment to ensuring the saety o ouroperations. Our response to the spillin ships, materials and manpower

was unprecedented. We createdindustry-wide task orces to identiy and learn rom any gaps in operationsor practices. Recommendationsrom these task orces have already helped improve the industry’ssaety perormance.

Across our industry—rom explorationand production to distribution andrening—we develop and constantly improve best practices or sae opera-tions, including training, operationalprocedures, equipment improvements,industry standards and technology—allowing access to new energy resources

while enhancing saety, e ciency andenvironmental protection.

The Oil and NaturalGas Industry, anEconomic Enginefor Our NationTe oil and natural gas industry’simpact on the U.S. economy issignicant, supporting more than

$1 trillion to the economy annually and 9.2 million U.S. jobs.1 Developing more o America’s oil and naturalgas resources will help meet growing demand, create hundreds o thousandso jobs, provide revenue to ederal andstate governments, and enhance ournation’s energy security.

Economic growth opportunitiesassociated with oil and natural gasdevelopment are signicant. A new study rom Wood Mackenzie showsthe greater potential or higher

government revenue rom increased energy production compared tohigher taxes on energy companies:

4Te study ound that rom2011 to 2025, negative economicconsequences o higher taxes

will, in the long run, more thanofset any short-term tax revenuegains. Under higher taxation,revenues are estimated to decreaseby $128 billion, but increasedaccess could generate an estimated$194 billion in additional

government revenue.

4More importantly, as millions o Americans struggle to nd work,in 2025 more than 530,000additional jobs are possible in theincreased access scenario. Te highertax scenario could result in job loss—estimated at almost 170,000 in thepeak job loss year o 2014.

1

Bettina J.Environmental, Health and Safety Technician

One of 9.2 million Americans whose jobs are

supported by the oil and natural gas industry.




Develop America’sEnergy Resources

Developing North America’s vast oil and natural gas resources, bothoshore and onshore, will helpmeet growing energy demand, createhundreds o thousands o new U.S.

jobs, provide billions in criticalrevenue to ederal, state and localgovernments, and enhance ourenergy security. With this in mind,policymakers should:

• Re-examine and reconsider limiting ofshore exploration and productionin the eastern Gul o Mexico and in

the Atlantic and Pacic.

• Continue plans or on- and ofshore Alaska development, which willgenerate thousands o jobs through-out the country—rom pipelinemanuacturers in the Midwestand computer technicians on thecoast to labor union workers orconstruction and maintenance.

• Expeditiously process and approvedrilling plans and permits orpending and uture lease areas.

• Support the onshore developmento natural gas, including shale gas,and rerain rom imposing unnec-essary new regulations or taxes onnatural gas operations.

• Promote policies and a regulatory environment that will support thegrowth and ree trade o Canadianoil sands, a reliable, sae and readily available energy source, including

the approval o key pipeline projectsthat will help create jobs in both theUnited States and Canada.

Avoid Puniti veNew Energy Taxes

With policies that create and sustain a level playing eld orall energy options, the oil and natural gas industry will createnew jobs and help uel the nation’seconomy. Conversely, adding billions o dollars in new and punitive taxes on our industry

will have a devastating impact on American jobs and economicgrowth. With this in mind,policymakers should:

• Advance policies that encouragecompany investment—creating jobs and making U.S. companiesmore competitive.

• Resist eforts to impose punitivenew taxes or costly and unnecessary regulations on American energy companies that would kill jobs,slow or reverse economic growthand harm American businesses andconsumers alike.

Enact Smart EnergyPolicy Based on SoundEconomic Principles

Burdensome and unnecessary EPAregulations could erode industryenvironmental and efciency gainand have unintended consequencor the U.S. economy. Our nationneeds policies that provide or eneexploration, energy production anenvironmental protection. With thin mind, policymakers should:

• Prevent the unintended consequeo EPA proposals. EPA’s mission and should be met through sciencally sound, cost-efective measuthat allow or continued economgrowth and job creation.

• Allow Congress to commit to a thoughtul and balanced approacto climate change that involves alstakeholders, rather than continuEPA eforts to regulate GHGemissions under the Clean Air Ac

• Tousands o U.S. businesseslarge and small depend on oil andnatural gas operations. Te industry supports businesses well outside theGul region—vendors that providevital support and services to Gul operations are located as ar away as Pennsylvania and Illinois.

Creating Good Jobs

• Te oil and natural gas industry supports more than 9.2 millionU.S. jobs, including 2.1 million direct jobs and 7.1 million indirect jobs rom the purchase o goodsand services.

•In 2008 and 2009, industry salariesin the exploration and production

sectors were more than double thenational average or all U.S. jobs.

• Te number o direct oil andnatural gas industry employeesis larger than the populationso 15 states.6

• Allowing oil and natural gascompanies to access domesticresources currently of-limitscould create hundreds o thousands o new jobs inthe uture.

with the right publicpolicies and partnershipbetween industry andpolicymakers, we canenhance our economic,environmental andenergy security

API and its member companiesare committed to working withpolicymakers to pursue a thoughtul,commonsense energy agenda—one that promotes U.S. economicgrowth, job creation and sae, reliable,afordable energy or the uture.

What the Industry is Doing

In addition to the development andimprovement o saety standards andoperations, the oil and natural gasindustry is at the oreront o:

• Developing advanced energy technologies, putting us on thecutting edge o exploring or, nding and producing energy resources;

• Increasing energy efciency ; and

• Diversiying energy resources, drawing upon a ull range o energy sources, including alternatives and renewables.

Industry investments in technologiessuch as cogeneration and carboncapture and storage (CCS), have reducedgreenhouse gas (GHG) emissions by more than 48 million metric tons o carbon dioxide equivalent rom 2007to 2008, a reduction comparable totaking 9.7 million cars of the roads.7

Te industry is also researching,developing and marketing alternativeand renewable sources o energy,including solar, geothermal, biouels,uel cells, hydrogen power and wind energy.

Growing the Economyby Developing America’sEnergy Resources

• Oil and natural gas companiespaid $1 trillion2 in total incometaxes rom 1980 through 2008and more than $178 billion3 tothe government in rent, royalty and bonus payments rom 1982through 2009.

• Te oil and natural gas industry provides the U.S. reasury,on average, with well over$95 million each day.4

• Allowing companies to accessoil and natural gas resources

currently of-limits could generatean additional $1.7 trillion5 in government revenue.

• Industry taxes, royalties, rentalpayments and other developmentees und community needs,including roads, schools and parks.

• Millions o Americans benet rom the industry’s strong economicperormance as shareholders in thesecompanies through pension plans,mutual unds, IRAs and 401k plans.

Who Owns “Big Oil?”(Holdings of Oil Stocks, 2007)

What Policymakers Should Do

Source:SONECON, “TheDistribution ofOwnership ofU.S. Oil

and Natural Gas Companies,” September2007.

Industry EmploymentLabor Income( $ millions)

Value Added( $ millions)

D ir ec t I mp ac t o f t he Oi l a nd Na tu ra l G as In du st ry 2 ,1 23 ,2 91 1 99 ,3 44 4 56 ,9 71

Indirect a nd I nd uc ed I mp ac ts o n O th er I nd us tr ie s 7 ,1 14 ,0 90 3 58 ,9 16 5 80 ,0 89

Services 3,399,474 149,462 181,720

Wholesale and Retail Trade 1,174,762 49,711 80,915

F inance , Ins ur ance , R ea l Est at e, R en ta l a nd L ea sing 8 28 ,9 04 4 7,48 7 7 3,32 2

Manufacturing 680,834 49,936 73,322

Transportation and Warehousing 276,492 13,892 18,746

Construction 220,923 11,185 13,722

Information 165,859 15,206 29,324

Agriculture 122,542 2,193 5,197

Utilities 26,272 4,309 14,652

Mining 10,898 1,037 2,068

Other 207,130 14,499 16,122

Total Impact 9,237,381 558,260 1,037,060

As a % of U.S. Total 5.2% 6.3% 7.5%

The Economic Impacts of the Oil and Natural GasIndustry on the U.S. Economy in 2007 by Industry

Source:PricewaterhouseCoopers, “TheEconomic Impacts oftheOil and Natural Gas Industryon theU.S .Economy,” September2009.




Policy ChoicesThat Ensure FutureEnergy Security

Our leaders must pursue a

thoughtful, commonsense energy

agenda that promotes U.S. job

creation, economic growth and

energy security, and avoids

harmful taxes or regulations.

We encourage policymakers to:

4Increase energy productionby supporting policies thatpromote all energy sources;

4Pursue policies that encourageinvestment in new energy projects and provide market-based solutions to meetenergy demand;

4Reject new energy taxesand turn aside unnecessary regulations on oil and naturalgas development; and

4 Abandon eforts by the EPA to regulate greenhouse gasesunder the Clean Air Act; instead,allow Congress to commit to a thoughtul and balanced approachto climate change that involves

all stakeholders.

Oil and natural gas are engines o eco-nomic development around the world.For the next several decades at least, we

will continue to rely on oil and naturalgas to meet growing energy demand,even as we increase our energy eciency,and as renewables and alternatives play an increasingly important role in a changing energy landscape.

Given this energy reality, the nationhas important decisions to make aboutits energy uture. What we needtoday—and tomorrow—are policy choices that increase, not decrease,energy production. We need increased

access to where oil and natural gas areound, while protecting national parksand ragile ecosystems. Governmentpolicies should harmonize our energy and environmental goals, encouraging responsible development that creates

jobs and helps drive our economy.

As a society, we cannot remainpassive to energy, the environmentor economic growth. Each will allshort o its ullest promise, absentconstructive industry-government

partnerships committed toproviding our nation with a

workable energy security policy.

We need to get it right on energy.oo much is at stake or ournation to do otherwise.

Conclusion

Sources1

PricewaterhouseCoopers LLP, “Te Economic Impacts of the Oil and Natural Gas Industry on the U.S. Economy in 2009:Employment, Labor Income, and Value Added,” May 2011.

2 http://tonto.eia.doe.gov/capps/rs/excel.cm?tableNumber=12&startYear=1977&endYear=2008.3 MMS, Oce o Natural Resources Revenue (ONRR).4 API calculations based on data rom EIA (http://tonto.eia.doe.gov/capps/rs/rstables.cm?tableNumber=12 <http://tonto.eia.doe.gov/capps/rs/rstables.cm?tableNumber=12>) and DOI, Oce o Natural Resources Revenue (http://www.onrr.gov/ONRRWebStats/Home.aspx <http://www.onrr.gov/ONRRWebStats/Home.aspx>) and direct request.

5 ICF International, “Strengthening Our Economy: Te Untapped U.S. Oil and Gas Resources,” December 5, 2008.

6 U.S. Census Bureau, “Annual Estimates o the Resident Population or the United States, Regions, States, and Puerto Rico: April 1, 2000 to July 1, 2009.”7

2 and Associates, “Emission Reductions Associated with U.S. Oil and Gas Industry Investments in Greenhouse Gas Mitigation echnologies,” March 2010.

Do Kim C., HomeownerOne of the 168 million Americans who

keeps her home warm thanks

to oil and natural gas

www.energytomorrow.org

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The State of American Energy: A Summary