Gerard: As goes North Dakota, so goes the nation
API leader proclaims new era of American energy abundance, independence
In his Jan. 9 State of American Energy Address, the president of the American Petroleum Institute called the country’s new-found energy resources a game-changer for both the economy and our geopolitics.
“If it is handled well, we can surpass Saudi Arabia in oil production by 2020,” said Jack N. Gerard, the API CEO, and a man many believed former Massachusetts governor W. Mitt Romney was considering to be his Energy Secretary.
“The energy industry should be allowed to do what it does best: create jobs and generate revenues,” , said Gerard, who for five years was a senior aide to the former senator James A. McClure. McCure, who died in 2011, served on the Senate’s Energy and Natural Resources Committee and during the Reagan years was it chairman. Gerard also worked with McClure at lobbying firm they founded together in the 1990s.
The address was given in the Andrew W. Mellon Auditorium, which connects two wings of the present-day Environment Protection Agency offices at Washington’s Federal Triangle campus.
Among the prominent guests in the audience were former Oklahoma Republican senator Donald L. Nickels, former National Security Advisor to President Barack Obama retired Marine Gen. James L. Jones Jr., and freshman Sen. Mary K. “Heidi” Heitkamp (D.-N.D.).
Gerard singled out Heitkamp and her state for special attention.
North Dakota had three wells operating in 1999 and now it has nearly 2,800, he said.
In 2012, the state passed both California and Texas in energy production and the state’s economy is growing at more than 7 percent per year since 2010, he said.
“In North Dakota, oil and natural gas revenue has created a budget surplus of $1.6 billion as of September 2012, thanks to the $3.6 billion in revenue provided by industry taxes,” he said.
“That is an impressive $2,339 for every resident of North Dakota and almost 40 percent of the state’s general fund spending,” he said.
“In 2011, the United States became a net exporter of petroleum products for the first time since 1949, thanks to industry investment in domestic oil and natural gas production and refinery upgrades,” he said.
The success in North Dakota is being replicated across the country, he said.
“Before accessing these unconventional plays, U.S. crude oil production was on a decline: from 9.6 million barrels per day in 1970 to 5 million barrels in 2008,” he said.
It is a new reality, he said.
Gerard said for too long Americans have thought about energy, specifically oil, in terms of scarcity.
“That is not true anymore,” he said.
This scarcity not only raised the cost of manufacturing in the United States, so that businesses needed to move their factories overseas to remain competitive, it also forced the country to become involved in Middle Eastern politics and wars, he said.
New technologies have created new ways to discover and extract oil and natural gas, he said. But, short-sighted regulation and taxation polices will prevent this new reality from taking hold.
The API president also addressed the process called “hydraulic fracking,” which used highly pressurized water to drive oil and natural gas from deposits in shale rock formations.
The term “fracking” has become a buzzword among environmentalists, who claim fracking threatens driving water.
The Matt Damon film “Promised Land,” deals with this controversy.
Gerard said fracking began in the 1940s and is now used safely at 35,000 American wells every year.
“The geology of each well is a little different, and consequently, wells are designed to best address individual conditions,” he said.
“The production sector has developed robust best practices based on its vast experience in order to minimize the environmental and community impacts associated with development,” he said.
The bottom line is that fracking is safe and vital to meeting the country’s needs, Gerard said.
“Increased access to U.S. oil and natural gas resources could create a million new jobs in the next 10 years alone,” he said.
These new jobs often go to women and minorities, said the Idaho native.
“Onshore, increased development and U.S. policies that encourage Canadian oil sands development could create an additional 700,000 U.S. jobs and generate more than $12 billion per year in government revenue by 2030,” he said.
Gerard said 85 percent of America’s continental shelf of off=limits for even exploration.
“Opportunities sit offshore as well. Opening areas off Florida’s coast in the eastern Gulf of Mexico to exploration and production could result in up to 100,000 new jobs in Florida by 2016,” he said.