US energy leader warns against anti-oil and gas policies

13 January 2010 20:52  [Source: ICIS news]

WASHINGTON (ICIS news)--A top US energy industry leader on Wednesday warned that Obama administration policies and efforts by Congress to impose climate change mandates will destroy jobs and undermine chemicals production and other manufacturing.

Jack Gerard, president of the American Petroleum Institute (API), told an energy forum that “Some of the policies advanced recently seem aimed at chilling the job creation potential of domestic oil and natural gas development”.

The US Department of the Interior (DOI) recently announced broad new restrictions for oil and gas exploration and development on public lands, an action that was criticised by Gerard and other energy industry officials.

Speaking at the US Energy Association’s annual outlook conference, Gerard also was critical of various bills pending in Congress that would impose emissions reductions on US utilities and the broad manufacturing sector in order to combat global warming.

“Some climate proposals would put US refiners at a competitive disadvantage, driving jobs out of the country, along with their emissions,” he said. “Other proposals would increase costs on the oil and natural gas industry, depressing new investment in domestic oil and gas prospects.”

While endorsing efforts to move the US toward a clean energy future - and noting that the nation’s oil and gas producers are leading investors in alternative power technologies - Gerard cited US Department of Energy (DOE) studies showing that oil and gas will still be needed to supply more than half of the country’s energy in 2030.

“We need to be investing now to meet that demand,” Gerard added.  “The International Energy Agency has warned that failure to develop now the oil and natural gas resources to meet future needs could lead to a supply crisis.”

He charged that some policymakers claim to support broader energy goals “even as they consistently espouse policies that would put that goal farther and farther out of reach”.

Gerard, who previously was president of the American Chemistry Council, voiced particular concern over policies that restrict natural gas development, potentially undermining chemicals production and the broad range of US manufacturing.

“Natural gas is one of our most flexible and clean-burning energy sources and can play an indispensable role in reducing greenhouse gas emissions,” he said, noting that natgas “can serve as a stable domestic energy supply for US manufacturing.”

“Ninety-six percent of everything manufactured in the US is touched by the business of chemistry,” Gerard said, “and the US chemical industry relies on natural gas as its primary feedstock.”

“Reducing acreage leased for oil and natural gas development by 75% as occurred in 2009 will not put America on a path of preparing for its real energy future,” he said.

Critics have charged that the Interior Department sharply reduced leasing of federal lands for energy development last year.

“Cancelling leases, delaying lease sales, delaying environmental studies, holding back the next OCS [outer continental shelf] five-year plan, and adding layers of bureaucracy and new procedures will not ensure Americans have ample supplies of the oil and natural gas that every projection shows they will be demanding in the near future,” Gerard said.

Congress is to reconvene next week and legislators are expected to again focus on climate legislation that they had hoped to pass before the end of 2009.

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Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy


By: Joe Kamalick
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