2015 ends on a high note for U.S. energy policy as Congress voted to repeal the obsolete, ‘70s-era ban on crude exports. Dozens of studies agree that lifting the restrictions will put downward pressure on gas prices, reduce the trade deficit, and provide a boost to economic growth and U.S. energy production.
Throughout the year, our status as the world’s leading producer of oil and natural gas continued to provide savings to American families and businesses while significantly enhancing our energy security. A review of the year’s energy developments shows how the American energy renaissance is paying off for consumers while also demonstrating that policymakers have some work to do in 2016:
Renewable Fuel Standard Threatens Engines, Economy: Ethanol volume mandates released in November by the EPA fall short in ensuring that Americans have access to fuels they can safely use in their vehicles. Ninety percent of vehicles on the road today are manufacturer-approved to use fuel blends with no more than 10 percent ethanol. Although EPA used its waiver authority to partially lower ethanol mandates, significant reform or repeal is necessary to prevent harm to the economy.
White House Rejects Keystone XL Pipeline: After seven years of exhaustive study and five positive State Department reviews, the White House rejected the Keystone XL pipeline and its 42,000 jobs. An overwhelming majority of American voters supported this shovel-ready project that would have enhanced American energy security. To realize the full benefits of the American energy resurgence, policymakers must prioritize updating the nation’s energy infrastructure, which could generate up to $1.15 trillion in new private capital investment and support 1.1 million new jobs.
Missed Offshore Opportunities: Despite strong national and state-level support for offshore energy development, government policy keeps 87 percent of federally controlled offshore acreage off limits to energy exploration. A new leasing plan released by the Interior Department in January did little to lift restrictions. The five-year plan for 2017 – 2022 only includes one potential Atlantic lease sale – and not until 2021. Promising areas in the Pacific, Arctic and Eastern Gulf of Mexico remain locked away.
New Ozone Rules Could Be Costliest Regulations Ever: New ozone regulations released by the Environmental Protection Agency (EPA) in early October could place one-third of U.S. counties out of attainment and subject to costly mitigation measures – even though ozone levels have already dropped 18 percent since 2000. The new ozone rules threaten to redirect resources away from creating jobs and toward meeting a standard that does not need to be tightened.
Report Affirms Safety of Hydraulic Fracturing: A five-year, multi-million dollar EPA study released in June concluded that fracking has not led to widespread, systemic impacts on drinking water. The Washington Post said of the report, “Given the economic and environmental benefits of using domestically fracked natural gas — which produces less carbon dioxide than coal when burned — the arguments for fracking bans continue to look very weak.”
American Energy Renaissance Drives Consumer Savings: The summer driving season kicked off with Memorial Day gas prices at five-year lows. The trend continued throughout the year, with Labor Day prices reaching 11-year lows and Thanksgiving gas prices approaching $2.00 per gallon due to increases in global market stability driven largely by U.S. production gains. Overall, the hydraulic fracturing-driven American energy resurgence is saving American families an average $1200 each yearper household.
U.S. Leads on Emissions Reductions: At the high-profile Paris climate conference, the United States occupied a unique position: We lead the world in both emissions reductions and production of oil and natural gas. Thanks to the availability and affordability of clean-burning natural gas, U.S. carbon emissions are near 20-year lows. Methane emissions have also dropped. U.S. success demonstrates that market-driven solutions can reduce emissions without sacrificing energy production or economic growth.
Recent polling shows a bipartisan majority of American voters agree that increased energy access could help create jobs (86 percent), stimulate the economy (84 percent), strengthen energy security (85 percent) and lower consumer energy costs (78 percent). When Congress reconvenes in 2016, policymakers should follow the lead of their constituents and make pro-energy policies a top priority.
By Jack Gerard
Originally posted December 29, 2015
Energy Tomorrow is brought to you by the American Petroleum Institute (API), which is the only national trade association that represents all aspects of America’s oil and natural gas industry. Our more than 500 corporate members, from the largest major oil company to the smallest of independents, come from all segments of the industry. They are producers, refiners, suppliers, pipeline operators and marine transporters, as well as service and supply companies that support all segments of the industry.
