U.S. CHAMBER OF COMMERCE

Energy Blog

Energy Blog

US Chamber of Commerce Blog

Sean Hackbarth John Watson, chairman and CEO of Chevron.John Watson, chairman and CEO of Chevron. Photo credit: Aaron M. Sprecher/Bloomberg.

The U.S. fracking boom can only do so much to meet world oil demand, says Chevron’s CEO.

“Shale can help. Certainly between now and the end of the decade it will be a big contributor to meeting that million-barrels-of-oil-demand growth that's out there,” John Watson told CNBC. “But ultimately oil fields decline, and we're going to need all sources of supply, including the shales, but also deepwater and other sources around the world.”

 2010-2040.EIA chart: U.S. Shale oil production: 2010-2040.Source: Energy Information Administration.


President Donald Trump is cognizant of this fact and has made unleashing American energy an important part of the first few months of his administration.

As Karen Harbert, president and CEO of the U.S. Chamber’s Institute for 21st Century Energy, noted, “Of all executive actions as well as bills to repeal Obama’s midnight regulations, 20% have been focused on energy.”

Last week, President Trump ordered a review of offshore energy development. In the future, we could see safe energy development in the Mid-Atlantic, the Eastern Gulf of Mexico, and the Arctic.

Regulatory Reform

On the regulatory front, the Trump administration earned a good grade from Watson. “Arguably it’s been one of the most significant things the Trump administration has done so far,” he declared. “There have been regulations and guidance documents that have been rescinded by the Trump administration that were just heaping costs on our industry with no discernible benefit.”

 

Locking in those gains is critical. “We have routine regulations in the country—we want those,” Watson explained. “But it’s the overreach without cost-benefit analysis without an understanding of what the real implications are that have hurt this economy.”

The first major move to modernizing the federal regulatory process in decades, the Regulatory Accountability Act, would achieve much of what Watson wants. It would focus federal agencies’ efforts on the most expensive rules and require more analysis, transparency, and public input.

Reining in the Regulatory State will pay off. “The speed of business is slowed by excessive regulation,” Watson said. “Rolling back the unnecessary regulations can kick start the economy in a big way.”

Sean Hackbarth Oil rig in the Gulf of Mexico

Here’s what a real “All-of-the-above” energy strategy looks like, and all it took was a stroke of a pen.

Unlike his predecessor, President Donald Trump is embracing American energy abundance. His latest action is an executive order reviewing President Barack Obama’s lock-down on offshore energy:

"Today we're unleashing American energy and clearing the way for thousands and thousands of high paying American energy jobs," said Trump, flanked by Republican lawmakers from energy-producing states during a White House signing ceremony.

"Our country is blessed with incredible natural resources including abundant offshore oil and natural gas resources, but the federal government has kept 94% of these offshore areas closed for exploration and production," he said. "This deprives our country of potentially thousands and thousands of jobs and billions in wealth."

The directive, known as the America First Offshore Energy Strategy, directs Interior Secretary Ryan Zinke to review the current five-year development plan on the Outer Continental Shelf for offshore oil and gas exploration as well as review the regulations and permitting process for development and seismic research.

The E.O. reviews every offshore area and could lead to future opportunities in the Mid-Atlantic, the Eastern Gulf of Mexico, and off Alaska’s coast. In other words, there will be a comprehensive, strategic look at how we can safely develop all our offshore energy resources--oil, natural, gas, and wind.

Map of U.S. offshore oil and natural gas resourcesMap of U.S. offshore oil and natural gas resourcesSource: American Petroleum Institute.


Specifically about the Arctic, the E.O. reverses President Obama’s attempt to permanently block future energy development in the Arctic Ocean. This could open the door to accessing the 34 billion barrels of oil and the 60 billion barrels (equivalent) of natural gas below the Arctic coast of the U.S.

National Petroleum Council chart on Arctic energy resources.National Petroleum Council chart on Arctic energy resources.Source: National Petroleum Council.


What’s more, not only does the E.O. re-evaluate what areas would be open to offshore energy development, but it also reviews nearly a dozen Interior Department rules issued by the Obama administration.

All in all it's a benefit for energy security. “President Trump has made it clear that developing and producing more American energy is a win for the economy and for American families,” said Karen Harbert, president and CEO of the U.S. Chamber’s Institute for 21st Century Energy. “We whole heartedly agree.”

Karen Alderman Harbert soab_footer_1200px.png

Ensuring secure, reliable, and affordable sources of energy has always been an important priority for the U.S. Chamber and our Institute for 21st Century Energy.  Over the last decade, America’s energy landscape has changed dramatically, from one of energy scarcity to energy abundance. 

Unfortunately, our nation’s energy policies didn’t catch up.  While we saw tremendous growth in energy production thanks to the development of shale oil and gas, it was largely in spite of federal policies, not because of them.  

Under the Trump Administration, however, there is now even more potential to grow our economy and make America a true energy superpower.  Over the first 100 days, the President and his Administration have demonstrated its commitment to an all of the above energy policy and begun working on policies that will help unleash more jobs and opportunities.

For instance, the Administration approved both the Dakota Access pipeline and the Keystone XL pipeline, two common sense infrastructure projects that had been politicized by extreme activists and celebrities.  Also, the President has made elimination of permitting roadblocks a top priority by issuing an executive order to begin the process of speeding up environmental reviews for infrastructure projects.  Without infrastructure in place to transport energy resources to consumers and markets, the economic benefits of the shale revolution will not be realized. 

Perhaps most importantly, the new administration has committed to collaborating with the states on environmental regulation instead of ignoring them and forcing mandates.   The Administration began working on curbing the so-called “Clean Power Plan,” which would have dramatically re-made the U.S. electricity sector while having a miniscule impact on global greenhouse gas emissions.  A similar announcement was made with regard to “Waters of the U.S.” rule, which have imposed layers of new regulations on governments and businesses far beyond what was necessary to protect clean water.  Countless other regulations are also under review, with an eye toward removing roadblocks to energy independence.

Meanwhile, American energy companies are investing in new technologies and constantly innovating to improve efficiency, reliability and safety, while keeping prices low.  Manufacturers are now leaving other countries where energy is more expensive and flocking to the U.S. to take advantage of our resources.  And thousands of companies eagerly await the promised shift towards a pro-energy development policy.

Unfortunately, there is a vocal and increasingly influential movement that wants to “keep it in the ground.”  This extremist movement ignores the realities of modern life, the continued global demand for energy resources, and the strong environmental record in the United States compared to other nations where energy could be produced instead. 

We believe that the facts are on our side, and that common sense and free enterprise will prevail.  The opportunities are too great, and with a concerted effort from the White House and Congress, the state of American energy can be even stronger.