Pe­tro­leum leader de­cries ‘ex­treme’ reg­u­la­tions

The Washington Times Weekly - - Politics - BY TIM DE­VANEY

De­spite Pres­i­dent Obama’s pledge to cut red tape for job-cre­at­ing in­dus­tries, reg­u­la­tions and other de­lays are hold­ing up bil­lions of dol­lars in in­vest­ments and thou­sands of jobs for oil and gas pro­duc­ers, the head of the Amer­i­can Pe­tro­leum In­sti­tute tells The Wash­ing­ton Times.

“Why would you take away from the very in­dus­try that’s cre­at­ing hun­dreds of thou­sands of jobs?” asked Jack Ger­ard, pres­i­dent and CEO of the Amer­i­can Pe­tro­leum In­sti­tute, who ac­cused the White House of not keep­ing its prom­ise. “Why would you pun­ish one of the [. . . ] in­dus­tries that is cre­at­ing more rev­enue for the fed­eral gov­ern­ment to­day than per­haps any in­dus­try? Why would you pe­nal­ize them?”

Oil and nat­u­ral gas com­pa­nies could cre­ate mil­lions more jobs if al­lowed to drill do­mes­ti­cally, Mr. Ger­ard said, adding that it also would help wean Amer­i­cans away from op­pres­sive for­eign gov­ern­ments and com­pa­nies re­spon­si­ble for high gas prices. An­other plus would be the gen­er­a­tion of bil­lions of tax dol­lars.

Over­bear­ing reg­u­la­tors, how­ever, are keep­ing that from hap­pen­ing, he said.

“We’re still very trou­bled by not only the num­ber of reg­u­la­tions, but the ex­treme na­ture of them,” Mr. Ger­ard said. “The pres­i­dent called on his peo­ple to re­view the reg­u­la­tory pro­cesses. But we can point to a num­ber of reg­u­la­tory pro­cesses that have been ini­ti­ated or con­tinue to go for­ward that dis­cour­age the de­vel­op­ment of oil and nat­u­ral gas in this coun­try.”

In one in­stance, three agen­cies are re­view­ing the same process, even though it has been safely used for 65 years, he said. The En­vi­ron­men­tal Pro­tec­tion Agency, de­spite its early study that found the prac­tice safe, along with the In­te­rior and En­ergy de­part­ments are in­ves­ti­gat­ing the process.

Mr. Ger­ard said a more stream­lined ap­proach in which one reg­u­la­tor re­views pro­cesses in a timely man­ner would help the in­dus­try ex­pand.

“Here’s one tech­nol­ogy; in­stead of look­ing at it from a reg­u­la­tory stand­point with one group, we have three dif­fer­ent en­ti­ties within the same gov­ern­ment that are re­view­ing the process,” he said. “They’re dis­cour­ag­ing pro­duc­tion, and they’re cre­at­ing un­cer­tainty.”

For those who fear do­mes­tic drilling poses too many risks, Mr. Ger­ard coun­ters that the in­dus­try is more care­ful than many peo­ple think.

“We take our re­spon­si­bil­ity se­ri­ously,” he said. “Any­one who sug­gests we’re cava­lier just doesn’t un­der­stand the in­dus­try, and they’re naive.”

Taxes are an­other big draw­back for oil and nat­u­ral gas com­pa­nies, Mr. Ger­ard said. The in­dus­try pays an ef­fec­tive tax rate of about 41 per­cent and con- trib­utes $86 mil­lion a day to the Trea­sury Depart­ment, but that hasn’t stopped calls for higher taxes to pun­ish the com­pa­nies.

“So when we hear things like, ‘Let’s go tax the oil in­dus­try’ or ‘Let’s go tax the nat­u­ral gas in­dus­try,’ there couldn’t be any­thing more harm­ful,” he said.

Reg­u­la­tory forces also are threat­en­ing in­vest­ment in the Gulf of Mex­ico for the first time since 1957, Mr. Ger­ard said.

But if the gov­ern­ment opened Amer­ica to do­mes­tic drilling, it would solve the coun­try’s most press­ing prob­lems, he ar­gued. The in­dus­try, which em­ploys 9.2 mil­lion Amer­i­cans and rep­re­sents 7.7 per­cent of the nation’s gross do­mes­tic prod­uct, could cre­ate an­other 190,000 jobs by 2013. By 2025, it could gen­er­ate an­other $194 bil­lion in tax rev- enue. By 2030, Amer­i­can could pro­duce 92 per­cent of its liq­uid fu­els in the U.S. and Canada.

“So when we hear these con­ver­sa­tions about en­ergy se­cu­rity - ‘We shouldn’t be re­ly­ing on oth­ers’ - the an­swers are all right here, right now,” Mr. Ger­ard said.

The Com­merce Depart­ment re­ported July 12 that the U.S. trade deficit is the largest since the height of the re­ces­sion in Oc­to­ber 2008, and it blamed oil im­ports for the prob­lem. Mr. Ger­ard said the po­ten­tial ex­ists to pro­duce an­other 5 mil­lion bar­rels a day in the U.S. and Canada.

“If we pro­duce more at home, we im­port less,” he said. “We can re­ally pro­duce the oil and nat­u­ral gas the coun­try needs for many, many years to come.”

One of the big­gest projects on the ta­ble is con­nect­ing the Key­stone pipe­line with Canada, Mr. Ger­ard said. It has been on the pres­i­dent’s desk for nearly three years, but he has not ap­proved it.

The pro­ject would cre­ate 20,000 jobs im­me­di­ately, he said. “If you’re look­ing for rev­enue, if you want job cre­ation in this coun­try, it’s on your desk, Mr. Pres­i­dent.”

Vir­ginia’s two U.S. sen­a­tors and the gov­er­nor want drilling op­er­a­tions in the state, Mr. Ger­ard said. “The thing that’s held them back is the ad­min­is­tra­tion.”

Lawmakers, and even the White House, even­tu­ally will come around to sup­port do­mes­tic drilling, he said.

“We don’t give up on any­body.”

BAR­BARA L. SAL­IS­BURY/THE WASH­ING­TON TIMES

Jack Ger­ard, pres­i­dent and CEO of the Amer­i­can Pe­tro­leum In­sti­tute, told The Wash­ing­ton Times on July 12 that oil and nat­u­ral gas com­pa­nies could cre­ate mil­lions more jobs if al­lowed to drill do­mes­ti­cally. An­other plus would be the gen­er­a­tion of bil­lions of tax dol­lars, he said.

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