Energy, Congress and Our National Conversation

Mark Green
Posted July 23, 2015

At an event last month, API President and CEO Jack Gerard sketched the broad outlines for a national conversation on energy, connecting energy policy with the approaching 2016 elections. It’s an appropriate linkage.

Our country has become a global energy superpower thanks largely to private innovation and entrepreneurship, which have created a generational opportunity – “the American moment,” Gerard called it. Sustaining the energy revolution requires vision, right policies and action – and the right leadership, which is why the 2016 vote matters. The energy path to help spur economic growth and prosperity and to increase national security is one that should transcend party politics. Gerard:

“Ultimately, our nation’s energy policies should set a course that transforms this American moment of energy abundance and domestic energy security into a lasting era of domestic energy security, economic prosperity and global energy leadership. ... We must make it clear to our elected leaders that we expect them to pursue energy policies that advance our nation’s economy, energy security and national security interests, and not to let the energy policy discussion become just another partisan talking point, because our energy future is too important and fundamental to our way of life and standard of living.”

Measured against the vision above, new energy legislation launched in Congress this week – though it has encouraging aspects – has a ways to go. Good is a provision setting a deadline for federal approval of applications to export liquefied natural gas found in the Senate bill. The House version sets the stage for adding key policy components as the legislative process moves along.

Still, as Gerard framed things above, the ultimate goal must be development of an energy strategy that fits the tremendous opportunity Americans have before them, to harness our energy wealth, grow our economy and become more secure in the world. API Executive Vice President Louis Finkel:

“The last major energy legislation was crafted in 2007, and important changes are needed to unlock the full economic and security benefits made possible by America’s energy revolution. America is now a global energy superpower, producing more oil and natural gas than any nation in the world. A truly comprehensive strategy is needed to harness that energy to create well-paying jobs, save consumers money, increase government revenues, and strengthen the security of America and its allies.”

Specifically, policymakers need to recognize the key pieces of such a strategy – pro-development actions detailed in a recent report by Wood Mackenzie. These include: increased access to energy offshore and onshore, a streamlined federal permitting process, quicker approval of energy infrastructure projects and lifting America’s decades-old ban on exporting domestic crude oil.

The study found that broad pro-development polices by 2035 could increase U.S. production by about 8 million barrels of oil equivalent per day, support 2.3 million more jobs, add $443 billion per year to the nation’s GDP, provide a cumulative $1.1 trillion in additional revenue to government and add $118 billion per year in household income. That’s what the pro-development path looks like, and the major legislation shaping up in Congress could be the policy foundation for that path. Legislation sponsors understandably seek bipartisan support as they go forward. But it should be acknowledged that developing more of our own energy is overwhelmingly supported by American voters who see domestic energy as key to jobs, prosperity and security. Finkel:

“This is a work in progress, but we are very encouraged that the initial Senate draft includes a bipartisan proposal to streamline the approval process for exports of liquefied natural gas. America is now the world’s largest natural gas producer, and our LNG exports will promote stronger domestic energy production, create more American jobs, and protect the security of the U.S. and its allies.  We urge lawmakers to seize this opportunity to support America’s growth as a global energy superpower by ensuring that the final package lifts outdated roadblocks to exports, infrastructure, and energy development.”