US energy leader urges policy changes by Obama

26 January 2010 19:27  [Source: ICIS news]

WASHINGTON (ICIS news)--The US energy industry on Tuesday urged President Barack Obama to reverse what is seen as the administration’s restrictive drilling policies in order to boost jobs, federal revenues and the nation’s energy security.

Jack Gerard, president of the American Petroleum Institute (API), said at a press conference that he hopes Obama will outline policies on Wednesday to increase production of domestic oil and gas resources.

Obama is to deliver his first “state of the union” speech before a joint session of Congress on Wednesday evening.

Usually presented each January, the annual report to Congress on the nation’s situation is traditionally used by the president to set policy and legislative goals for the year ahead.

Obama’s state of the union speech is seen as having particular weight because it will be the president’s first outline of his major policy goals since last week’s upset election victory for Republicans in Massachusetts.

Republican Scott Brown won the 19 January Massachusetts special election to fill the US Senate seat formerly held by the late Ted Kennedy, a leading liberal Democrat and Obama ally who had held the seat for nearly 50 years.

The Massachusetts election was expected to be a no-contest win for Democrats, and the loss is seen by many as a repudiation of Obama and his policies.

“We understand that in his state of the union speech, President Obama will focus on jobs,” Gerard said. “We welcome his move to job creation, and the oil and gas industry wants to extend a hand to the administration toward that goal.”

“We hope that the president recognizes the potential for job creation in the energy industry,” he added.  “Our industry already supports more than 9m American jobs, and we have the potential to create many more.”

However, Gerard said, policies put in place in the first year of the Obama administration have reduced US domestic energy production.

“Key talking points for the White House and Congress have been that we need to reduce our dependence on foreign energy,” Gerard said, “but the policies put in place by the administration and Congress are making us more dependent on foreign energy by making it more difficult to produce domestic oil and gas.”

Gerard charged that policies in the last year under Interior Department Secretary Ken Salazar have impeded, rather than enhanced, energy development on federal lands.

“Since Salazar has taken office, the total federal acreage leased, offshore and onshore, has fallen to the lowest level on record,” Gerard said. “Total leases in 2009 generated less than $1bn [€710m] in revenue to the US government compared with $10bn just the year before.”

“That’s a 90% reduction in the revenue that could be going into federal coffers,” he said.

“In his state of the union speech, our hope is that President Obama will focus on what he can do to lessen the burden on the US working class, especially by increasing rather than decreasing domestic oil and gas production,” Gerard said.

He also criticised White House budget proposals that would increase taxes on oil and gas development.

Gerard said that relations are not good between the nation’s energy industry and the Interior Department.  Salazar has recently charged that the energy sector has used lies and deception in the energy debate and that US oil and gas companies have treated energy resources on federal lands as their “personal candy store”.

“We would greatly appreciate the opportunity to have better communications with the Interior Department,” Gerard said. “Those communications have not been as successful or productive as they should be.”

($1 = €0.71)

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