The People of America's Oil and Natural Gas Indusry

New Study Illuminates Right Energy Path for U.S.

Mark Green

Mark Green
Posted April 5, 2017

The advent of America’s energy renaissance has brought important benefits: consumer savings, jobs and economic growth, environmental progress and increased energy security. Yet it also presents us with some important questions: Will America embrace its new energy wealth and the expanded consumer benefits it represents? What’s America’s vision for our energy future, and what policies are needed to realize that vision? This is the larger energy debate in this country.

The vast majority of Americans recognize the great opportunities being provided by this new U.S. energy abundance, one that has made the U.S. the world’s leading oil and natural gas producer. An election-night survey of actual voters found overwhelming support for increased oil and gas production, increased access to domestic energy reserves and support for more energy infrastructure.

study_coverYet, a vocal minority works to obstruct safe energy development and infrastructure projects, including needed pipelines. They would force the United States to go back to a time of growing energy dependence, with restricted choices, rising prices and uncertainty for consumers.

Until now, their anti-energy rhetoric has mostly remained detached from reality – and largely unaccountable. No more. A new study finds this minority’s anti-fossil fuel agenda would produce harsh economic impacts affecting virtually every part of our society.

The study was prepared for API by OnLocation, an economic consulting firm with more than 20 years of experience providing technical support for the U.S. Energy Information Administration (EIA). Using EIA’s own economic modeling software and the same base-case inputs from EIA’s 2016 Annual Energy Outlook, the study explored what would happen if the U.S. halted new oil and natural gas leases, banned hydraulic fracturing, prohibited new or expanded coal mines and stopped permitting energy infrastructure, including pipelines and import/export facilities.

In other words, what do the words, “Keep It In The Ground,” mean in real life? Key findings:

  • 5.9 million jobs would be lost by 2040 – a figure that accounts for “green” jobs that may be created.
  • $11.8 trillion in cumulative GDP lost by 2040.
  • Reduced oil and natural gas production, down 11.7 million barrels per day from EIA’s baseline forecast.

Such restrictions on fossil fuel energy would severely curtail economic growth and return the United States to recession-level unemployment.

Potential consumer impacts would be no less significant. According to the study, U.S. households would see dramatic increases in direct energy expenditures by 2040 – that is, costs associated with heating, cooling and powering their homes:


The total impact on U.S. consumers would be much higher – $4,552 increase per household over EIA’s baseline forecast – not only in direct household costs but also higher energy costs throughout the economy for transportation fuel, for energy needed to produce goods and services and more:


Costs for fuels would rise, the study found. Below, the estimated percentage increase in residential natural gas, motor gasoline and average electricity price, for 2020 (blue bars) and 2040 (red bars):


API President and CEO Jack Gerard discussed the study during a conference call with reporters, calling out the two opposing visions for America’s energy future – one in which safe and responsible development of U.S. energy continues to grow and yield the benefits mentioned above, and one in which energy, and choices, are restricted:

“What this study shows is that when you look at these two competing visions, what does it really mean to the American people? And I think you see a very stark contrast. … Let’s get into reality, and let’s have a conversation. That’s why I think this study is so important: It reduces the rhetoric down to reality and gives the public, policymakers and others an opportunity to say, what does this really mean?”

Gerard said extreme activists would “not only erase, but reverse” gains produced by the U.S. energy renaissance – based on a false premise that America has to choose between energy security and environmental progress.

The fact is, according to EIA, U.S. carbon dioxide emissions from electricity generation are at their lowest level in nearly 30 years – thanks to increased use of cleaner-burning natural gas. More than 60 percent of the carbon dioxide reductions in the power sector from 2005 to 2016 have resulted from switching from higher-emission generation to natural gas generation, EIA says.

EIA projects that oil and natural gas will supply more than 60 percent of U.S. energy in 2040, even under aggressive growth in renewable energy. Meanwhile, projections show worldwide energy consumption will grow by nearly 40 percent by 2040, and 67 percent of that will be met by fossil fuels. Gerard:

“These are the facts. Contrary to claims from the ‘keep it in the ground’ movement, cutting U.S. oil and natural gas production wouldn’t magically reduce world energy demand. But it could raise costs significantly for American families and manufacturers, profoundly damage the U.S. economy, diminish our geopolitical influence, and severely weaken our energy security.”

The right choice for America is one of wisely and responsibly developing U.S. energy, rejecting the restrictive path which, as the OnLocation study shows, is really no path at all. Gerard:

“The overwhelming majority of American voters choose 21st century energy abundance over 20th century energy scarcity. With forward-thinking energy policies, we can ensure the U.S. energy renaissance continues to provide benefits for American consumers, workers and the environment.”


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.