American Petroleum Institute study examines impacts of restricted fossil fuel production

The American Petroleum Institute (API) released a study this week, examining the effects of a future in which fossil fuel production is limited.

The study assumed a scenario that includes no new private, State, or Federal oil and natural gas leases, a complete ban on hydraulic fracturing, no new coal mines or expansion of existing mines and no new energy infrastructure including pipelines.

That scenario, the study found, could result in the loss of 5.9 million jobs and $11.8 trillion in cumulative gross domestic product. It could also lead to a potential increase of $4,552 energy expenditures per household annually.

In announcing the release of the study, API President and CEO Jack Gerard advocated for policies that encourage fossil fuel production and stressed the potential impacts of policies that restrict fossil fuel production.

“U.S. energy leadership is generating major economic benefits for American families and businesses,” Gerard said. “Increased energy production and infrastructure investment could create hundreds of thousands of additional jobs. Restrictive policies would take the United States back to an era of energy dependence – all based on the false idea that we must choose between energy self-sufficiency and environmental progress.”

API’s report also found that the scenario assumed in the study could lead to an increase of $40 in the price of a barrel of crude oil, an increase of $21 in the cost of natural gas and a potential increase of 56.4 percent in retail electricity prices.

“Cutting U.S. oil and natural gas production wouldn’t magically reduce world energy demand,” Gerard said. “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. With forward-thinking energy policies, we can ensure the U.S. energy renaissance continues to provide benefits for American consumers, workers and the environment.”