API CEO cites innovation, infrastructure investment as critical to shaping American energy in 2018
American Petroleum Institute (API) President and CEO Jack Gerard on Tuesday highlighted how technological innovations in the oil and natural gas sector will continue to pave the way for a cleaner and safer energy future, but more investment in U.S. energy infrastructure is needed to facilitate growth.
“Industry innovation and technological breakthroughs are why the U.S. is the world’s largest producer of natural gas, oil and refined products,” Gerard said during a speech on the 2018 state of American energy.
“We develop and deploy the most advanced systems, infrared devices, fiber optics and drones to ensure safety around the block. And we’ve deployed technological advances throughout the supply chain,” he said. “We are powering positive change in reliability, safety and environmental performance every day through technology and innovation,” Gerard added.
High-tech energy innovations have been largely responsible for upticks in manufacturing, the reduction of costs for gasoline, diesel, electricity and home heating over the years, as well as lowered greenhouse gas emissions.
Production and refining both are up this year, according to API, yet air pollutants are way down. In fact, the national trade organization that represents the oil and natural gas industry noted that air pollution has decreased 73 percent since 1970, and in the past 10 years, carbon dioxide emissions specifically have fallen in 43 states.
And the effects are noticeable on the pocketbook as well. API crunched the numbers and determined that in 2015 alone, lowered energy costs caused by such innovations led to an average savings of $1,337 for the average household. AAA backed such figures up with a report that motorists saved nearly $550 at the gas pump throughout 2014, as U.S. oil production increased.
Manufacturing is further promoting this, with more than 170,000 manufacturing jobs added in 2017. Yet Gerard tied this latter bit to infrastructure building—something he notably thanked the administration for, even as he emphasized that such work goes beyond highways, roads and bridges, which rely on government funding to operate.
“In addition to that traditional infrastructure focus, consider the potential for energy infrastructure investment,” Gerard said. “According to a recent study, private investment in U.S. energy infrastructure is a more than $1 trillion proposition and could support more than 1 million jobs per year through 2035. By expanding our focus beyond traditional infrastructure and considering the great opportunity of energy infrastructure investments, we could potentially double the economic benefits of infrastructure in this country.”
Among the benefits tied to this were career potentials. Gerard pointed out that, at this point, the natural gas and oil industry pays, on average, nearly $50,000 higher than the average U.S. salary. With as many as 1.9 million job opportunities projected to reach that industry by 2035, he also reached out to minority communities and younger generations, describing energy as an opportunity for everybody, one that will be dependent on the changing demographics of society.
Citing another study, he said that African American and Hispanic workers are expected to fill nearly 40 percent of the industry’s positions by 2035, and around 200,000 jobs will go to women. Recognizing that will be a long-term discussion, Gerard nevertheless offered an olive branch to millennials, saying that they already constitute a full one-third of the oil and natural gas industry’s workforce, and it was time to ready for their greater involvement.
A study to be released this week by API, but hinted at by Gerard, found that millennials could represent nearly 41 percent of that workforce in just seven years.
“By harnessing this generation’s unshakable confidence in a better future and use of technology, the industry is positioned well to address tomorrow’s greatest challenges,” Gerard said.
Many of those challenges, for API, appear to be tied to regulations and governmental oversight.
“We favor policies that promote entrepreneurial innovation, driven by markets, to continue the positive transformation of the American energy landscape,” Gerard said.
There were calls for streamlining of the permitting process and emphasis of an America-first market approach. API seeks to reform or outright eliminate the Renewable Fuel Standard. The organization also supports Monday’s Federal Energy Regulatory Commission decision to reject the grid resilience pricing rule proposed by the Department of Energy, saying that regulators should hold off from intervention in a marketplace like theirs.
Gerard also pointed to New England, which has resisted efforts at pipeline and other infrastructure developments harder than some other areas. Gerard said the result is some of the highest electricity costs in the nation, despite the abundance of natural gas in the area. By contrast, the recent five-year plan released by the Trump administration and the revamping of the tax code by the Republican-dominated Congress were both praised for efforts to advance development in the outer continental shelf and the additional funds it will release to the industry, respectively.
Gerard also touted the North American Free Trade Agreement (NAFTA) as critical to the success of energy markets in the United States, Mexico and Canada. Whereas President Donald Trump has threatened to scrap NAFTA entirely if it doesn’t meet his desires for an update, Gerard said that if the agreement can’t be modernized, it should be left in place.
Because if a destroyed relationship causes the United States to be unable to develop processes in these other countries, someone else will find away, in API’s view.
“It’s better to strengthen that relationship than bring dramatic uncertainty,” Gerard said.
