From Oil & Gas Journal:
API study quantifies ‘keep-it-in-the-ground’ policies’ consequences
Adopting “keep it in the ground” policies that antifossil fuel activists advocate could make the average US household’s energy costs jump $4,550 in 2040 from increased transportation fuel, electricity, home heating, and goods and services costs, a study commissioned by the American Petroleum Institute concluded.
“While 80% of American voters support increased US oil and natural gas production, a vocal minority are working to obstruct energy development and infrastructure projects, reducing our energy options under a false belief that oil and gas production and use are incompatible with environmental progress,” API Pres. Jack N. Gerard said on Apr. 4 as the trade association released the report.
“Their vision is one of constrained energy choices, with less energy certainty and reliability, and with less assurance on affordable power,” Gerard said, adding that API wants to “replace rhetoric with reality.”
He said, “The overwhelming majority of Americans support policies to maintain US energy leadership. This pro-energy vision means energy from all sources, where oil and gas play a central role in providing abundant and affordable [supplies], generating economic growth and reducing carbon emissions.”
He said API hired OnLocation Inc., a Vienna, Va., firm with more than 20 years’ experience providing technical support for US Energy Information Administration modeling, to conduct the new study.
It used EIA’s own economic model software and the identical base case inputs from its 2016 Annual Energy Outlook to explore what would happen if the US halted new federal oil and gas leases, banned hydraulic fracturing, prohibited new or expanded coal mines, and stopped issuing permits for energy infrastructure, including pipelines and import/export facilities, Gerard said.
Among its highlights, the study found that by 2040, adopting all the policies that anti-fossil fuel activists promote to “keep it in the ground” and improve environmental quality would:
• Cost 5.9 million jobs and $11.8 trillion of cumulative gross domestic product.
• Potentially increase prices for crude oil by $40/bbl and for natural gas by $21/MMbtu.
• Potentially raise retail electricity prices by 56.4%.
“It’s a stark contrast to today’s world, in which US energy leadership is generating major economic benefits for American families and businesses,” Gerard said. “Shale energy supported 2.1 million jobs in 2012, and that number is projected to increase to 3.9 million jobs by 2025, including 500,000 manufacturing jobs. Increased energy production and infrastructure investment could create hundreds of thousands of additional jobs.”
Extreme activists would not only erase, but reverse, all those gains, taking the US back to an era of energy dependence based on a false idea that the country must choose between energy security and environmental progress, he warned.
“In reality, we lead the world both in reduction of carbon emissions and in production and refining of oil and gas,” Gerard said. “Carbon emissions from power generation have plunged to nearly 30-year lows primarily because of greater availability of clean-burning natural gas. In fact, more than 60% of the carbon reductions in the electric power sector from 2005 to 2016 have been the result of fuel switching from higher-emission fuels to gas.”
Gerard said as fossil fuel opponents move their challenges from the federal to state and local governments, petroleum councils that API supports in more than 20 states and a grass-roots network with more than 40 million members will need to step up with accurate information.
“When you look at what’s taking place, it’s time to move from the rhetoric and present the reality to state legislatures and county commissions. Many local communities haven’t faced issues like this before. When you bring in the reality, it helps their governments reach more intelligent decisions,” he said.
“I’m confident the clear majority of the Americans share our view. We just need to get more of them engaged in this process we call politics,” Gerard said.