The US “is on the cusp of an energy boom that is already creating hundreds of thousands of jobs, revitalizing entire communities, and reinvigorating American manufacturing,” said US Chamber of Commerce President and CEO Thomas Donohue as he laid out the Chamber’s priorities for 2012.

In his annual “State of American Business” report, delivered Thursday in the Italianate Hall of Flags in the Chamber’s Lafayette Square headquarters, Donohue highlighted energy first as a sector offering vast promise in jobs and revenue to help revitalize the US economy, but only if domestic resources are developed.

Donohue pointed to unconventional oil and gas discoveries, including natural gas in Pennsylvania, Ohio, New York and West Virginia, and oil in North Dakota, as examples of the jobs boom these resources can bring “With the right policies, the oil and natural gas industry could create more than 1 million jobs by 2018,” Donohue said.

Read more about the huge opportunities presented by unconventional oil and gas plays on Breaking Energy here.

Ample and cheap gas supplies mean petrochemical companies are considering coming back to the US, and may encourage other manufacturing, he said.

Donohue said the US has enough oil to last 200 years, natural gas for 120 years, and coal for 450 years. “We must speed up permitting and end many of the restrictions that have put key areas off-limits” due in some cases to “political expedience,” Donohue said.

He said the nation must “harness all our resources, traditional and alternative – while expanding nuclear power and driving greater efficiency.” He called efficiency “the most important environmental resource we have.”

Keystone XL Stays In The Spotlight

The first thing President Obama should do, he said, is approve building of TransCanada’s Keystone XL pipeline, to bring crude from Alberta’s oil sands south to US pipelines. Echoing American Petroleum Institute CEO Jack Gerard, Donohue said approval would immediately create 20,000 jobs and “over 250,000 over the life of the project.”

The Natural Resources Defense Council, which opposes the pipeline on environmental grounds, is calling those figures “discredited” and cites State Department documents showing the project would create no more than 6,000 jobs in construction and 100 or so for operations. Congress has given President Obama until Feb. 21 to decide on the project, and Sen. John Hoeven (R-ND) is already drafting legislation to take approval authority away from the President if Obama says no.

Donohue said the Keystone project “has passed every environmental test” during three years of review, and will be “laid next to 22 other pipelines” with solid safety records.

For more on the Keystone project on Breaking Energy, read here.

A related Chamber priority is regulatory reform. Donohue decried “an avalanche” of new regulations, saying the number of regulations pending across the Obama administration is larger than the number on the books now. He said the Environmental Protection Agency alone has 200 pending rules.

“This adds up to a big drag on our economy,” he said.

Donohue said the Chamber “supports necessary, sensible and forward-looking regulations,” but will fight “regulatory activism that is based on bad data, dubious authority or pure politics.”

Donohue said the Chamber expects economic growth to slow in the first half of 2012, to about 2.5%, and “work its way back up to about 3%” by year’s end. That growth rate means anemic improvement in unemployment.

The economy can do better if government and business work together, leveraging private ingenuity and capital, Donohue said, but now conflicts among political leaders are “undermining business and consumer confidence and slowing down the economy.” He called on leaders to work together, saying 2012 “must not be a wasted year simply because it is an election year.”

Donohue also announced the chamber will be active in the 2012 elections, with the “most aggressive voter education effort” in the Chamber’s 100-year history. He didn’t specify how much the Chamber would spend; it reported spending $33.5 million in the 2008 election.

Photo Caption: People listen while Thomas Donohue, CEO and President of the US Chamber of Commerce, delivers the annual ‘State of American Business’ address at the US Chamber of Commerce January 12, 2012 in Washington, DC. Donohue spoke about the US economy and his strategies to improve it.