The administration of Donald Trump and the 115th Congress—having concluded 2017 by passing and enacting the first substantial federal tax reforms in decades—should turn their attention now to regulatory reforms and improvements to infrastructure that include new oil and gas pipelines, American Petroleum Institute Pres. Jack N. Gerard said.
“According to a recent study, private investment in US energy infrastructure is a more than $1 trillion proposition and could support more than 1 million jobs/year through 2035,” Gerard noted in his keynote address at API’s 2018 State of American Energy event on Jan. 9.
“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,” Gerard said. “And this isn’t just about the dollars and cents. Getting the policy right on energy infrastructure will lead to greater reliability, safety, security, and affordability.”
Gerard said the recent cold snap highlighted differences states and regions that embrace American energy abundance and those which do not.
“New Englanders have been subject to some of the highest electricity costs in the nation—well above the national average—because of resistance to infrastructure development. This is despite the fact that they are living adjacent to abundant, affordable, reliable, and clean natural gas in the Marcellus shale region,” Gerard said. “In contrast, in Ohio, electricity prices held steady or even declined even during peak demand.
“We need policies that put consumers first—policies that allow for private investment to safely build infrastructure to meet the energy demands of everyone, every time, everywhere,” he said.
‘A high-tech industry’
Industry innovation and technological breakthroughs are why the US is the world’s largest producer of natural gas, crude oil, and refined products, Gerard said. “We are a high-tech industry—analyzing a tremendous amount of data in real time to head off impacts and incidents. We are identifying trends and constantly improving our accuracy and efficiency. We develop and deploy the most advanced systems, infrared devices, fiber optics, and drones to ensure safety around the clock. And we’ve deployed technological advances throughout the supply chain.”
This has led to an unforeseen manufacturing revival, lower consumer costs, and greatly reduced carbon and other air emissions, Gerard said. “At the same time, production and refining have increased significantly. We are in the midst of transformational progress. And it is happening quicker, cleaner, and safer than ever before,” Gerard said.
In the year ahead and in years to come, API seeks creation of an enduring regulatory environment that gives consumers access to reliable and affordable domestic energy and build on the industry's core commitment to safety, Gerard said. “We support streamlining the permitting process and reinforcing a market-based approach that puts the American people first,” he said.
The association also would like to see Congress repeal or reform the federal Renewable Fuel Standard because its quotas no longer reflect market and supply realities, Gerard said. “Forcing higher ethanol blends into the fuel supply hurts consumers and is incompatible with many car engines. America’s energy reality in 2018 is vastly different from when the law was enacted a decade ago,” he said.
In a press conference following his address, Gerard said API appreciated Congress and the administration’s recognizing that oil and gas is highly capital-intensive and deciding to keep most of the cost recovery provisions in the current federal tax code. “Our industry also benefits with most other American businesses from a reduced corporate tax rate,” he noted.
Gerard said he believes President Trump is fulfilling energy commitments he made in his 2016 campaign with regulatory reforms that some critics unfairly call rollbacks. “If regulatory processes are used to obstruct much-needed infrastructure, we are ready to resist, particularly when the obstructions are erected for other less direct reasons than supplying energy to consumers at a reasonable cost,” Gerard said.
Contact Nick Snow at [email protected].
