Innovation vital to ongoing US energy strength, group leaders say

Feb. 4, 2019
The innovative spirit that has created a much-improved US energy outlook in the last 10 years will be just as essential to keep it affordable while improving the environment in the future, three major trade association leaders suggested at the US Energy Association’s 2019 State of the Energy Industry Forum on Jan. 24.

The innovative spirit that has created a much-improved US energy outlook in the last 10 years will be just as essential to keep it affordable while improving the environment in the future, three major trade association leaders suggested at the US Energy Association’s 2019 State of the Energy Industry Forum on Jan. 24.

“Nine times since 2001, we’ve reduced annual carbon emissions. That’s a record no other nation matches,” American Petroleum Institute Pres. Mike Sommers said. “It’s really a dual challenge of meeting consumer demand and working to innovate operations. Our members are stepping up aggressively.”

Edison Electric Institute Pres. Thomas R. Kuhn noted, “I think we have an opportunity to accelerate the reinvention of the US energy industry, but it starts with the consumer, who is becoming increasingly educated. That’s good, but it creates a demand for affordable and reliable service while addressing environmental realities.”

American Gas Association Pres. David K. McCurdy said, “Resilience means being able to respond to events and supply reliable, steady energy to your customers. Markets work best when you have a strong democracy and a free press, but it’s time to avoid extreme partisanship and get government working again. The shutdown has to stop.”

Sommers said API would like to see more oil and gas transportation systems built to handle rising US production, congressional ratification of the US-Mexico-Canada trade agreement, and a serious effort to reform the federal Renewable Fuel Standard and correct flaws that are based on global market conditions that are 10 years out of date.

Tariff, quota consequences

“Further retaliatory tariffs will undercut US energy exports to China and cede a major overseas market to other producing countries,” Sommers said. “Tariffs and quotas on imported specialty steel will also be a handicap. We will need to recognize that fossil fuels will be our main energy source as we continue to improve the environment. The long-term trend is lower US emissions.”

EEI’s Kuhn said a third of US generated power comes from renewables. Natural gas also is reducing carbon emissions as it is increasingly used to generate power instead of coal, he said. “We will continue this trend, but it will require a combination of reliable and renewable sources. Storage is improving. So is efficiency. But more will be needed. Policies that address the carbon issue without breaking the bank would be preferable.”

AGA’s McCurdy noted that in 2018, 87 bcfd of gas was supplied to end users. The US Energy Information Administration forecasts that this will grow to 90 bcfd in 2019, “but the good news is that we have more than 19 tcf of supplies,” he said, adding, “Even with exports, which could hit 9 bcfd this year, we don’t expect an impact on prices because domestic production is so high.”

Transportation is an issue, but the Trump administration is working to improve the federal project permitting process, McCurdy said. “Pipeline safety reauthorization will be a major priority this year. We’ll need to explain high-profile incidents if they occur, but they have been few and far between. We will continue to emphasize our safety goals, which have helped our member companies keep incidents to a minimum.”