INSIDE VIEW ’12: America at energy crossroads – NPRA

04 January 2012 22:30  [Source: ICIS news]

Charles DrevnaBy Charles T. Drevna
NPRA, National Petrochemical & Refiners Association

Editor’s note: US chemical industry association leaders were given the opportunity to express their views on the challenges and opportunities for 2012.

Editor’s note: NPRA is changing its name at the end of January to AFPM, the American Fuel & Petrochemical Manufacturers.

In his novel “A Tale of Two Cities,” Charles Dickens wrote his famous line that “it was the best of times, it was the worst of times”.

As we look ahead to 2012, we see America at the crossroads facing two paths to very different energy futures – a choice between the best of times and the worst. Results of the November 2012 elections for the presidency and Congress will play a key role in determining which path the nation will take in the years ahead.

One path would take America to a new era of prosperity – the best of times. Government would give companies that produce oil and natural gas and that manufacture fuels and petrochemicals the freedom they need to harness the proven, reliable and abundant energy resources under North America to meet the nation’s needs, create jobs, and strengthen US economic and national security.

Following this path, the federal government would permit more exploration and drilling for oil and natural gas in many parts of the United States now off-limits to energy production. The president would allow construction of the Keystone XL pipeline to bring oil from America’s close friend and neighbor Canada to US refineries, creating an estimated 85,000 new US jobs by 2020 and making America less reliant on oil from other parts of the world.

Under this “best of times” path, states and the federal government would also allow increased use of hydraulic fracturing, known as fracking, to sharply increase production of natural gas in America. States would abandon efforts to impose low carbon fuel standards that would raise energy costs for American families and businesses. The Environmental Protection Agency would use cost-benefit analyses to determine which environmental regulations are beneficial and which amount to overregulation that causes far more harm than good.

The second path – the “worst of times” for America’s energy future – would take the US to an era of increased dependence on foreign energy and petrochemicals, increased unemployment, increased spending of taxpayer dollars to subsidize costly and inefficient new sources of energy and chemical raw materials, and decreased economic and national security.

The first path is based on a belief in economic growth created by increased American production of energy, fuels and petrochemicals.

The second path assumes energy is scarce and that producing oil and natural gas and using these substances as raw materials for refining and petrochemical manufacturing in America are harmful activities that should be curtailed.

It should be obvious to everyone that the first path makes more sense and is in America’s national interest. But the well-organized and well-funded opponents of fossil fuels have succeeded in waging a decades-long misinformation campaign that has convinced many Americans that the second path is really the better choice.

The determined opponents of oil and natural gas have managed to persuade millions of people to accept three false premises as truth.

These false premises state that: America is rapidly running out of oil and natural gas; emissions from oil and gas and from petroleum fuel and petrochemical manufacturing and use are gravely damaging the environment; and substitutes for petroleum fuels and petrochemicals are just around the corner.

Let’s look at the facts.

A December report from the Institute for Energy Research says there are 1.79 trillion barrels of recoverable oil in North America (the US, Canada and Mexico). The report says this is “almost twice as much as the combined proved reserves of all OPEC nations”.

The same report says there are 4.244 quadrillion cubic feet of recoverable natural gas in North America. This is “more natural gas than all of the next five largest national proved reserves … Russia, Iran, Qatar, Saudi Arabia and Turkmenistan,” the report says.

The Institute for Energy Research report goes on to point out that the amount of recoverable oil and gas has risen repeatedly and enormously over the years as new discoveries and new technologies have made it possible to extract oil and gas deposits previously unknown or unrecoverable at affordable costs.

As a result, the institute forecasts that today’s estimates of recoverable oil and natural gas will increase in the years ahead, even as consumption of oil and gas continues.

When it comes to the environment, the refiners and petrochemical manufacturers I represent have an outstanding record of compliance with Environmental Protection Agency and other regulations, and have invested hundreds of billions of dollars to dramatically reduce emissions as measured by EPA.

As a result of emissions reductions by NPRA members and other industries, America’s air today is cleaner than it has been in generations.

Refiners have cut sulfur levels in gasoline by 90 percent just since 2004. We have also reduced sulfur in diesel fuel by more than 90 percent since 2005 and reduced benzene in conventional gasoline by 45 percent since 2010.

EPA data shows that total emissions of the six principal air pollutants in the United States have dropped by 57 percent since 1980 and ozone levels have decreased by 30 percent. These reductions occurred even as industrial output and the number of vehicles on the road have increased. EPA data indicates there will be continued reductions in the years ahead under regulations already in place.

The point of all these statistics is this: America can have a healthy environment and a healthy economy at the same time, and it makes no sense to let special interest groups deny the American people access to our nation’s energy riches. 

Regarding “alternative” fuels and sources of chemical feedstocks: the promotion and hype surrounding these products has been enormous, but the “alternatives” have not held up in the real world.

Time and time again, “alternatives” have proven to be too impractical, too costly and too unpopular with consumers to survive. Some “alternatives” hang on with the help of massive taxpayer subsidies, like the $7,500 that goes to each of the few consumers who’ve purchased electric cars. Other “alternatives” like cellulosic ethanol have been just a few years away from commercial scale production for very many years.

Substitutes for petrochemicals have also failed repeatedly to live up to the promises of their promoters.

Hopes and dreams are wonderful things, but fuel and petrochemical manufactures have to deal with the world as it is, not as our critics would like it to be.

Study after study points to the tremendous benefits our industries can bring to America if we are only given the opportunity.

A recent study by Wood Mackenzie found that changes in American oil and gas policies could create more than 1.4 million new US jobs and $800 billion in additional government revenue by 2030. A new study by IHS Global Insight says the shale gas industry alone could create 1.6 million American jobs by 2035.

 It’s tragic that while millions of Americans are unable to find work and while the United States continues to export jobs and import more and more products, the Obama administration and some in Congress continue to pursue an extremist anti-oil and anti-gas agenda that hurts American workers, hurts American consumers and hurts the American economy. 

If the companies that make up America’s oil and gas sector are given the opportunity, the United States can embark on the path to greater energy security and employment that will benefit all Americans in the years ahead.

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